State Gas Limited (ASX:GAS) has taken substantial strides in advancing its compressed natural gas (CNG) facility’s commissioning and construction. This facility forms a critical component in supporting ongoing testing and early-stage gas sales from the Rolleston West (ATP 2062) project in the southern Bowen Basin.
Transitioning from Plans to Reality: CNG Shipments to Commence Soon
With a focus on leveraging its innovative virtual pipeline trucking strategy, State Gas is primed to initiate CNG shipments to end users within the Bowen Basin by the end of November 2023. This marks a pivotal juncture in the company’s journey toward realising tangible results.
Collaborative Progress: State Gas Partners with Wasco for CNG Facility
In a strategic partnership that underscores dedication to progress, State Gas is on the verge of executing a construction contract with Wasco (Australia) Pty Ltd (“Wasco”) for the establishment of the CNG facility and its associated infrastructure. An intensive eight-month collaborative effort has culminated in designing and engineering a CNG facility with the capacity to compress up to 1.7TJ/day of gas. Sourced from the Rougemont 2/3 lateral well system (“Rougemont 2/3”), which exhibited robust production testing outcomes between February and May 2023, the gas to be processed holds the promise of robust financial returns.
Projected Outputs: Catalyst for Initial Revenues and Cashflows
Anticipating future developments, State Gas forecasts that when linked to the CNG facility, the Rougemont 2/3 well could potentially generate up to 0.75TJ/day of CNG. This output not only promises to usher in modest yet significant initial revenues but also serve as the foundation for consistent cashflows for the company.
Swift Construction Path: Efficient Execution Ahead
State Gas, in close partnership with Wasco, is committed to an ambitious construction and commissioning timeline, targeting completion within a mere ten weeks, weather permitting. Evidencing the commitment to efficiency, all essential components for the CNG Plant have successfully passed factory acceptance testing at Wasco’s Brisbane yards. Moreover, State Gas is poised to collaborate with the landowner in selecting the most opportune date to initiate on-site activities, with preliminary civil works potentially commencing as early as next month.
Chairman’s Perspective: Turning Vision into Reality
Richard Cottee, the Executive Chairman of State Gas, expressed his sentiments on this momentous progress, stating, “Now that the relevant funding has been secured, the Company can move forward with confidence and make the important transition from explorer to early-stage producer. Our partners Wasco have enabled us to deliver a flexible, low-cost production solution that will enable State Gas to conduct further production and appraisal testing of the Rolleston West project, but more importantly start generating initial cashflow for the Company. The Company is now focussed on the rapid execution of the construction and commissioning process.”
