Perth-based energy company Norwest Energy has reached an agreement to acquire a 20% equity interest in Pilbara Clean Fuels (PCF), a company formed to progress the development of clean fuels production opportunities at Port Hedland, Western Australia.
PCF is progressing a development concept for a mid-scale, electrified liquefied natural gas (eLNG) plant in Port Hedland, also known as the world’s largest iron ore export port.
The principal purpose of the plant will be the conversion of pipeline natural gas to LNG on a tolling basis, with the LNG to be marketed as marine bunker fuel for bulk iron ore carriers operating out of the port.
An initial capacity of 0.5 MTpa is planned, with potential future expansion up to 1.5 MTpa. An outsourced power supply from predominantly renewable sources will offer the potential to significantly reduce Scope-1 and Scope-2 emissions when compared to a conventional LNG plant, Norwest explained.
Under the agreement with PCF, Norwest will invest $300,000 to fund an initial six-month assess stage work program that is designed to progress the project towards the select stage, at which point the technical and commercial options for the project can be defined to attract further investment.
Norwest said it does not envisage becoming a significant owner of the eLNG facility, and has no obligation to provide further funding, but instead will hold preferential rights to utilise a portion of the eLNG plant’s capacity on a tolling basis under pre-agreed commercial principles.
This provides a possible market for some of Norwest’s equity share of gas from its Lockyer project, with a linkage to international LNG pricing.
Norwest’s managing director, Iain Smith commented: “We are pleased to enter into this partnership with Pilbara Clean Fuels, which provides Norwest with a potential future revenue stream from Lockyer gas for a nominal upfront investment.”
For this project, PCF has entered into an exclusive development partnership with Technip Energies in and has selected Air Products Inc. as the preferred liquefaction technology licensor and core equipment supplier.
PCF is engaging Technip Energies and other specialist consulting groups to implement the initial studies and assessment work program.