Queensland Pacific Metals Ltd (ASX:QPM) welcomes the Memorandum of Understanding (MoU) between its subsidiary QPME and Fitzroy Coal Management Pty Ltd to expedite gas drainage at the Carborough Downs steel making coal underground mine.
The agreement aims to enhance safety measures, reduce CO2 emissions, and provide cost-effective gas supplies to the Moranbah Project infrastructure.
Surface to in-seam well
Fitzroy, the operator of Carborough Downs mine, will collaborate with QPME to accelerate gas drainage in the Carborough Downs Domain 3 mining area. This involves implementing a surface to in-seam (SIS) well program designed by Fitzroy, aiming to supply around 6.9 PJ of gas to the existing gas gathering infrastructure of the Moranbah Project.
The joint waste gas collection program aligns with QPME's collaborative approach to working with regional coal mine operators, aiming to reduce CO2 emissions and contribute to the gas supplies of the Moranbah Project infrastructure.
Carborough Downs mine, located in the Northern Bowen Basin, holds gas reserves in the Domain 3 area. Prior to mining in this area, Fitzroy must drain the gas from the coal seam to meet safety and environmental requirements.
Traditionally, this gas would be flared, resulting in carbon emissions. Fitzroy's SIS well drilling program, scheduled over four years, aims to recover around 6.9 PJ of gas over seven years.
Under the MoU, QPME will have rights to the recovered gas for sale to customers, including the TECH Project, or for electricity generation at the Townsville Power Station.
Reductions in carbon emissions
The collaboration benefits both QPME and Fitzroy. Fitzroy gains reductions in CO2 emissions, a safer mining environment with lower gas levels, and reduced gas drainage costs. QPME secures cost-effective gas production, enables a near-term increase in production, and increases the utility of the project's infrastructure capacity.
To facilitate the joint waste gas drainage and collection for the Domain 3 project, QPME and Fitzroy will negotiate a supplementary agreement, as the existing co-development agreements are not suitable for the planned commercial initiatives.
The costs of the SIS well program, estimated at around $35 million, will be shared equally. An additional $1.5 million is anticipated for the gas gathering infrastructure required to connect the Domain 3 gas to the existing Moranbah Project infrastructure.
Enhanced safety
The MoU with Fitzroy aligns with QPME's carbon abatement strategy, focusing on working with regional coal mines to drain and collect waste gas for cost-effective production at the Moranbah Project. Early gas drainage is crucial for maximising gas collection, minimising carbon emissions, and enhancing safety. QPME is engaged in discussions with other coal miners and expresses confidence in securing additional gas for the Moranbah Project.
With this MoU, QPME and Fitzroy strengthen their collaborative efforts, driving significant progress in gas drainage and collection, benefiting the environment and the Moranbah Project's operational efficiency.