COMPETITIVELY priced and locally produced energy for the Mount Isa region has the potential to change the landscape for mining operators, according to the boss of a key player in gas exploration.
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Armour Energy has entered a non-binding memorandum of understanding with MMG Century to work together towards gas supply arrangements from Armour’s exploration tenements in North West Queensland to MMG’s Queensland operations.
The move could be a game-changer for the mining industry in the North West and the catalyst for more cost efficient energy options, says Armour CEO Robbert de Weijer.
“The supply of locally produced and competitively priced energy to the Mount Isa region in Queensland which currently uses 35-40PJ per annum of gas has the potential to change the landscape for mining operators there who currently use either expensive diesel fuel or gas transported from large distances away and which is becoming more expensive and increasingly scarce,” he said.
The memorandum of understanding was win-win for both Armour and MMG, Mr Weijer said
“Armour and MMG have recognised the potential for mutual and significant value creation through the supply of gas from Armour’s exploration acreage in North West Queensland to MMG’s potential future operations in the region,” he said.
Mr Weijer said the move is proof of Armour’s “potentially enormous shale gas resources in the region”.
In June 2013, Armour announced a heads of agreement with APA Group to work together to facilitate the transportation of up to 330 petajoules of gas per annum from Armour’s northern Australian gas projects to various markets in Mount Isa, Sydney and Gladstone.
Stage one of the project involves a 320 kilometre pipeline connection to Mount Isa.
MMG general manager of Queensland operations Mark Adams said he was pleased to commence the working relationship with Armour Energy.
“Secure, cost-effective energy supply is critical to the further development of the region, and for MMG’s ongoing investigations into future uses for its extensive North West Queensland infrastructure,” he said.
An MMG Century spokesperson said the company continues to explore future options that have the potential to extend the life of operations.
“An integral part of planning around future options is a reliable and cost-effective energy supply,” the spokesperson said.
