Perth-based Cool Energy is considering a public capital raising if upcoming field tests on its new technology to extract prohibitive greenhouse gas carbon dioxide from gas streams are successful.
Perth-based Cool Energy is considering a public capital raising if upcoming field tests on its new technology to extract prohibitive greenhouse gas carbon dioxide from gas streams are successful.
The technology could result in hundreds of gas fields around the world, currently not developed because of their high carbon dioxide levels, being brought on stream.
The company is to trial this and another Western Australian-invented water extraction technology at Arc Energy’s Xyris gas plant near Dongara in the Perth Basin, beginning early next year.
Oil and gas major Woodside Energy has appointed Cool Energy to project manage the construction, commission-ing and trial of Woodside’s dehydration technology plant, along with Cool Energy’s complementary CryoCell technology.
WA Business News understands that, if the trials are successful, the company is considering an initial public offer as part of future capital raising plans for CryoCell’s further development and worldwide marketing.
The dehydration technology is designed to remove water from natural gas streams to avoid metal corrosion and freezing during the cryogenic processes to liquefy the gas, while CryoCell is a gas sweetening technology that removes CO2.
Both technologies are based on the same principles and were invented by Dr Robert Amin, head of the Woodside Hydrocarbon Research Facility of Curtin University of Technology and a director of Cool Energy.
Dr Amin made news earlier this year due to a link with Senator Ross Lightfoot’s controversial trip to Iraq.
Commissioning of the dehydration technology is expected to begin in January next year, with field trials scheduled for February 2006. CryoCell will be demonstrated in series with the dehydration technology.
Cool Energy managing director Jessie Inman said it would be a significant achievement to take the dehydrator technology from a proven laboratory testing environment and replicate those results under field operating conditions with the support of well-established partners.
“Following the installation and commissioning of the dehydration technology, Dr Amin will test it as a stand-alone technology for three weeks and then connect it to the CryoCell for integrated testing,” she said.
The Woodside and Cool Energy plants have been designed to process two million standard cubic feet a day of natural gas with a CO2 content of up to 14 per cent.
Arc’s Xyris gasfield, about 360 kilometres north of Perth, began delivering a relatively small flow of 10 terajoules (TJ) gas a day into the Parmelia pipeline for South West customers in November last year.
The pipeline has a capacity of 90TJ/day.
Arc recently completed its takeover of Voyager Energy and the Dongara gas processing facility to make it the major player in the Perth Basin.
The company has also locked in several new gas supply deals, including one with Western Power and Midland Brick.
Woodside Energy new tech-nologies manager Neil Kavanagh described Cool Energy as a highly innovative company that was building a world-class team with an opportunity to create a significant break through in gas processing.
“We look forward to creating a strong partnership and share in the opportunities the dehydration technology will bring to the oil and gas industry,” Mr Kavanagh said.
Cool Energy’s technology was initially developed by Curtin University of Technology and the company formed in 2003 by Richard Beresford GRANGE Resources’ search for an equity partner in the development of its billion dollar-plus Southdown magnetite and iron pellet project has received a boost with a resource increase to more than 400 million tonnes.
Getting the resource over this level was critical to the viability of the project. Latest drilling has lifted the Southdown resource, 90 kilometres north-east of Albany, from 279mt to 426mt at an economical 36 per cent magnetite.
A preliminary pit optimisation has forecast production of 142mt of upgraded 68.3 per cent iron concentrate over 22 years to be transported via slurry pipeline to Albany port, beginning in 2008.
A preliminary scoping study for the development of the Southdown magnetite and its pelletisation in Malaysia at 6.8mt a year adds further weight to the project’s economics. The study projects pellet operating costs of approximately $A44 a tonne, forecast pellet prices of $85.3/t for a cash margin of $41.3/t.
Final capital and operating costs will be determined by a $13.7 million bankable feasibility study, the technical aspects of which are due for completion before the end of the year, with environmental and statutory approvals expected mid 2006.
A 156-hole drilling program is due for completion this week.
Grange managing director Geoff Wedlock has acknowledged that funding is likely to involve new equity partners, with Grange retaining around 33 per cent, to be funded on a debt and equity basis.
The company has appointed Sydney-based BurnVoir Corporate Finance to assist in finding suitable joint venture partners and information on the project has been provided to a number of interested parties.
Mr Wedlock said that, ideally, the company wanted a partner (or partners) that would develop both Southdown and the Kemaman pellet plant on the east coast of Malaysia.
Grange has had lengthy discussions with the Albany Port Authority regarding an upgrade of facilities to handle larger, cape-sized ships.
Dredging is a critical feature of the project and involves taking the channel depth from 12.3 metres to 15m.
“If you can’t load big ships, you’re not going to be competitive in the long term. Whether Grange does it or the port authority is yet to be determined,” Mr Wedlock said.
The infrastructure at Kemaman is largely in place, with the current loading wharf requiring only minor modification to enable docking of cape-sized vessels.
Mr Wedlock sees the growing Asian market as the obvious one for the Kemaman product, with the short shipping distances providing a significant cost saving.
“Along with the Asian market, we are also well positioned to tap into markets in India and the Middle East,” he said.
Pellet demand has been steadily increasing since 2001 at between five million and six million tonnes annually. Few new pellet plants have been built since 1997, with the bulk of supplies coming from Brazil and Canada, distant sources with higher transport costs.
Grange plunged $5.1 million into the red in the 2004-2005 financial year, compared with a $5 million operating profit the previous year.
The loss was generated on revenue of $7.13 million, well down on the previous $27.3 million, the fall due to a decline in copper concentrate shipments from the company’s now exhausted and closed Reward Deeps and Conviction underground mine in Queensland.
At the end of the year Grange had net assets of just under $20 million, consisting mainly of $11.6 million in cash investments, including cash backed security deposits and a $7.5 million value attributable to capitalised exploration and evaluation expenditure associated with the Southdown magnetite project.
