BY REUBEN ADAMS
WESTFARMERS subsidiary EVOL LNG has entered into a long-term agreement with Gascoyne Resources to supply LNG to the Dalgaranga gold project in the Murchison region of WA.
In December, Zenith Energy executed the PPA to build, own and operate a 15MW gas-fired power station to service the mine, which will begin production in the June quarter this year.
Dalgaranga will use LNG to fuel both Zenith Energy’s 15MW gas-fired power station and the 2.5mtpa gold processing facility, with supply planned to commence in the second quarter of 2018.
EVOL LNG business manager Nick Rea said the project emphasised that trucked LNG could support a gas-powered microgrid at a remote mine site without requiring full diesel redundancy.
“Zenith Energy has developed a gas-fired solution with a fuel efficiency better than diesel generation that also delivers the required load-acceptance capability,” he said.
“Mining and industry are increasingly seeking viable, low emission alternatives for their operations, so supplying cleaner LNG that’s produced 100 per cent in WA makes economic sense and supports local jobs.”
EVOL LNG will build, own and operate a one million litre on-site LNG storage and vaporisation facility, which will keep the mine operational for up to two weeks if road access to the remote site is interrupted.
Gascoyne Resources managing director Mike Dunbar said the 2.5mtpa Dalgaranga gold processing facility would also use LNG to fuel its carbon regeneration kiln, elution boiler and bullion furnace.
“Our decision to adopt LNG to fuel the project is about delivering the lowest energy costs, and doing so with a high level of reliability,” Mr Dunbar said.
“In addition to significant bottom line cost savings, Gascoyne will avoid more than 63,000 tonnes of carbon emissions over the same period, which is equivalent to keeping 4,000 cars off the road.”
The Dalgaranga project is one of the highest margin undeveloped gold projects in Australia. With pre-production CAPEX for processing plant and associated infrastructure of $86 million, the company expects payback within 18 months of first production.