Deal to develop gasfields a step closer
METGASCO has entered into a $7 million conditional agreement with Molopo Australia to purchase two gasfields at Casino and Grafton.
Metgasco managing director David Johnson said it was the next logical step in the development of the company's interests in the region.
“NSW energy markets are facing a looming shortage of gas,” Mr Johnson said.
“Metgasco is working hard to prove up reserves of gas and gas-fired power into this market.”
The company spent five years conducting drilling tests in the Casino area before declaring in February commercial quantities of methane gas had been discovered.
Metgasco has lodged a development application with the NSW Government to build a $42 million gas-fuelled power station in Casino.
The power plant, which is likely to be built in three stages, will comprise 10 three-megawatt reciprocating gas engines.
The plant will cover about half of a 4ha site about 3km south-east of Casino, which is currently used for farming.
To extract the gas reserves Metgasco will install and operate 40 seam methane wells and 15 conventional gas wells at 20 locations around Casino over seven to 12 years.
Metgasco wants to deliver the gas to the power station through buried, low-pressure pipelines.
It is also proposing to build a pipeline which will channel gas from Casino to Ipswich, in south-east Queensland. It will be known as the Lyonsway Pipeline.
The purchase of the new gas reserves means Metgasco now owns all methane gas permits in the region.
The sale consideration comprises $3 million in cash and $4 million in Metgasco shares, with a 2.5 per cent royalty from 50pc of the gas from one of two Casino fields.