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    Australia's State Gas pens CNG supply deal


The Australian gas producer will supply the CNG to Thiess, a mining services company. [Image: State Gas]

by: Shardul Sharma

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Natural Gas & LNG News, Asia/Oceania, Corporate, Gas for Transport, News By Country, Australia

Australia's State Gas pens CNG supply deal

Australian gas producer State Gas has signed an initial offtake agreement with Thiess, a mining services company, to supply compressed natural gas (CNG) to the Curragh coal mining operation near Blackwater in Central Queensland, it announced on April 5.

As part of its role as a contract miner at Curragh, Thiess has been evaluating hybrid mine-truck engine technology and has now agreed with the Curragh mine owner to extend and expand the trial. Initially, small volumes of CNG will be supplied to support the trial's gradual ramp-up and to establish efficient loading and unloading processes for the virtual pipeline at Curragh. If successful, the trial could ultimately support up to 100GJ/day of CNG for each mine truck involved.

The trial will initially support two trucks, with a view to converting more engines to hybrid technology subject to Thiess and the Curragh mine-owner's satisfaction with the trial result, State Gas said.

“The ability for State Gas to supply increasing quantities of CNG to a location on the Curragh mine-site where the mine-trucks can be safely loaded is a unique aspect of State Gas' value proposition. For this reason, the contracted price for CNG under this supply arrangement is at a premium to the spot price of raw pipeline gas,” it said.

State Gas will process coalbed methane (CBM) from its Rougemont 2/3 well into CNG at its pilot plant, which is nearing completion and is touted as the first of its kind in Australia. The facility, with a capacity to compress up to 1.7TJ/day of pipeline-quality natural gas, will serve users in the Southern Bowen Basin and surrounding areas. Specially designed gas tube trailers will transport CNG to remote customers lacking traditional pipeline infrastructure.

State Gas is planning to truck CNG to the market to commercialise its proven gas resource at Reid's Dome project in Queensland. The company believes that its CNG supply approach will create substantial opportunities for natural gas to be used in a range of commercial applications that support lower carbon emissions.