Synertec Corporation Ltd (ASX:SOP) is set to further consolidate its position in the renewable energy sector with energy giant Santos confirming its intent to place additional orders for the company's “world-leading” Powerhouse technology, taking the share price as high as $0.26, up 19.2% from previous close.
The decision follows a comprehensive six-month global procurement process, wherein Synertec emerged as the preferred choice for Santos and its GLNG JV.
Powerhouse is a predictive intelligence solar and battery microgrid system providing renewable electrical power supply to remote sites.
Santos confirmed its intent to issue purchase orders for a further two Powerhouse systems to be delivered to the GLNG JV1 in FY24, with manufacturing to kick off immediately.
Moving forward, Synertec continues to identify and progress further opportunities for the application of the Powerhouse system across the energy, mining and other sectors.
Zero-emission energy power
Synertec managing director Michael Carroll said: “Today’s award, coupled with Santos’ and the GLNG JV’s designation of Powerhouse as their technology of choice for zero-emission energy power systems, provides further global industry validation as to the exceptional technical and commercial merits of Powerhouse providing reliable, sustainable and affordable continuous power as an intelligent microgrid for remote locations.
“Gladstone Liquified Natural Gas Joint Venture (GLNG JV) is an unincorporated joint venture established in 2011 between Santos, TotalEnergies, Petronas and Kogas, which primarily operates in the Surat and Bowen basins in Queensland, Australia. Santos is GLNG’s Upstream Operator.
“It is responsible for the development and operation of GLNG’s gas fields and processing hubs. Santos is one of Australia’s biggest domestic gas suppliers and aims to be a leading LNG supplier in the Asia-Pacific region LNG supplier.
“This follows its outstanding performance in the field over the past year and confirms the feedback we received from the likes of the US Department of Energy, global banks and industry when we toured the United States to better understand the market positioning of Powerhouse.
“The system continues to demonstrate exceptional operational performance when compared to diesel, gas and hybrid generation systems.”
Revenue contributor by end of FY24
The two Powerhouse units are to be sized and delivered under commercial terms similar to the successful prototype commercialised in March 2023.
Synertec will commence manufacture of the units immediately, with key long-lead-time components already in hand.
The units are expected to be deployed to greenfield well sites in Queensland, near the existing Powerhouse unit at Myalla.
The units are anticipated to be on-site and contributing to Synertec’s revenue by the end of FY24.
Key terms
Key commercial terms were already defined in the GSC between the two parties and include a BOOM delivery model with flat monthly rental over a minimum term of three years, with an accepted asset life of 15 years.
Synertec will fund the development of these initial units from its inventory and cash reserves. In anticipation, Synertec placed orders for long lead time items during FY23 and either has on hand or has secured, all key components such as batteries, solar panels, computers and other key control system components.
The assembly of these Powerhouse units will again be undertaken in Brisbane, by the same team that developed and delivered the Powerhouse prototype unit.
About Powerhouse
Powerhouse is a unique and field-proven proprietary smart renewable technology developed by Synertec, which enables the utilisation of 100% renewable energy through predictive intelligence to reliably and continuously power critical industrial-scale applications in remote locations.
Following extensive testing, the Powerhouse prototype unit officially transitioned to commercial operations on April 1, 2023, and has operated exceptionally through a number of extreme weather events including lightning strikes and cyclonic conditions, delivering strong operational performance.
Carroll added: “Powerhouse’s predictive Intelligence control system has ensured that the remote site has received reliable continuous renewable baseload power at substantially lower operating cost when compared to the performance of traditional electrical power generation.
“Our success in this procurement process with Santos and the GLNG JV now paves the way for a broader deployment of Powerhouse to Santos and other operators.
“The large target market we see for Powerhouse across both domestic and international markets requiring reliable, continuous and commercial baseload power, which is 100% renewable, provides a significant growth opportunity for Synertec and one that has the potential to substantially elevate Synertec’s financial profile in the coming years.”