Australia’s QPM hikes gas output, flags Ni, Li downturn

Australian battery metals refiner Queensland Pacific Metals (QPM) said is facing a challenging investment environment as it seeks funding for its proposed Townsville Energy Chemicals Hub (TECH) project to produce chemicals for lithium-ion batteries and electric vehicles.

Acknowledging the current state of the lithium and nickel market, QPM said an improvement in macroeconomic conditions will likely be needed for the TECH project to progress to produce 16,000 t/yr of nickel and 1,750 t/yr of cobalt sulphates from imported laterite ore.

The project has largely completed its engineering and technical design work with QPM's expenditure falling by 62pc during October-December from the average of the two previous quarters, the company said, with costs to continue to drop for January-March.

The firm's gas division QPM Energy reported output from its Moranbah coal mine waste gas project was up during October-December, with gas production of 28 TJ/d (748,000 m³/d) and a pathway to further growth in 2024, QPM said on 31 January.

An A$80mn ($53mn) well development programme agreed with 7 PJ/yr customer Dyno Nobel, a wholly owned subsidiary of Australian fertiliser and industrial chemicals group Incitec Pivot, will start in April. An A$1mn well workover programme returned 2 TJ/d to QPM during October-December.

QPM expects to have about 130 wells operational by June, up from 100 at the acquisition of Moranbah.

Further available supplies have been directed to the Thai-controlled energy firm Ratch Australia's 242MW gas-fired Townsville Power Station (TPS) in Queensland, with sales rising from 97TJ in September to 242TJ in December. QPM is targeting delivery of gas to TPS at a rate of 5 PJ/yr within six months of completing the Moranbah project acquisition, with delivery for December equating to around 3 PJ/yr at present rates.

The firm said further enquiries regarding gas supplies have been received during the quarter, with mining and industrial companies seeking to replace diesel as a fuel source because of the expense of approximately A$35/GJ. QPM is assessing setting up an energy hub at its TECH project to supply compressed natural gas, LNG or a hydrogen firming gas power station at its Lansdown site, 40km south of Townsville.

By Tom Major