Australia’s QPM to sell gas to Townsville Power Station

Australian producer Queensland Pacific Metals (QPM) plans to sell gas to Thai-controlled energy firm Ratch Australia to boost peaking output at the 242MW gas-fired Townsville Power Station (TPS) in Queensland state.

Battery plant developer QPM recently agreed to acquire the Moranbah gas project, which supplies gas to Ratch-owned TPS and has sole rights to the power subsequently generated. As part of the initial agreement disclosed on 14 June, Ratch and QPM have agreed to exclusively negotiate and enter into a new capacity agreement for 100pc of TPS' generation from February 2025, when the existing deal ends.

QPM said securing TPS' capacity will provide significant electricity revenues for its business through sales to the National Electricity Market (NEM). The company is targeting delivery of gas to TPS at a rate of 5 PJ/yr within six months of completing the Moranbah project acquisition.

QPM plans to expand Moranbah's present gas production of 10 PJ/yr by 2-3 PJ/yr within six months of the deal's finalisation, before eventually increasing total output from the northern Bowen basin to 20 PJ/yr to meet the needs of its Townsville Energy Chemicals Hub project.

The federal government's safeguard mechanism, which will cover many coal projects in the Bowen basin, is likely to boost coal-seam methane gas production in the region as collieries seek to sell waste coal mine gas instead of flaring it to cut scope 1 emissions, according to QPM. Scope 1 emissions come from direct operations.

The agreement is also likely to increase TPS' ability to ramp up generation to address shortfalls in the NEM, QPM said. Coal-fired power closures amounting to 14pc of the market's total capacity over the next decade poses a challenge to reliable supply, the Australian Energy Market Operator (Aemo) said. Plentiful solar capacity exists in northern Australia, but requires back-up through new dispatchable generation and storage capacity, Aemo added.

By Tom Major