Transcription of Finance News Network Interview with Liberty Resources Limited (ASX:LBY) Chairman and Managing Director, Andrew HaythorpeDonna Sawyer: Hello I’m Donna Sawyer for the Finance News Network. Joining me from Liberty Resources Limited
(ASX:LBY) is Chairman and Managing Director, Andrew Haythorpe. Andrew welcome to FNN.
Andrew Haythorpe: Thank you Donna.
Donna Sawyer: You’ve announced plans to focus on developing a $1.4 billion gas plant and then further down the line, adding additional components such as fertiliser production. What’s the thinking there?
Andrew Haythorpe: Well it’s very simple. There’re many Australians that currently think there’s going to be a chronic shortage of gas and dramatically increasing gas prices. So that creates a real business opportunity. We don’t see that this gas pricing increase and shortage of gas is necessary, Australia has more resources and more gas than we could ever hope for. So our process is an innovative development, the next generation, where we produce gas as an intermediate product and then we take it through to low cost fertiliser.
Donna Sawyer: What is the market appetite for funding new energy supply projects such as a gas plant, even a modest one of around $1.4 billion?
Andrew Haythorpe: Well it’s interesting that you say it’s a modest plant of $1.4 billion, because it wasn’t that long ago when $1.4 billion was a lot of money. However, in this day and age there’s a huge amount of money that’s been created; literally created, printed and stored if you like, or invested amongst superannuation and pension funds around the world. So firstly, there’s a large amount of money.
The second thing is that when you look at the big picture, not just the money, but the need for food and energy is ever growing and ever imported. So of course, if opportunity for investors to invest in a secure project, in a secure location that’s a low cost energy and food provider by virtue of our project, ultimately it’s a no-brainer.
Donna Sawyer: Tell me about the difference between in-situ underground coal gasification, and current coal seam gas operations and technology. The latter seems to be attracting public debate in Queensland.
Andrew Haythorpe: It certainly does and in our case, what we see in our enhanced energy recovery process where the next evolution or the next generation in the industry, we get 25 times more gas per unit of area. Which if you turn that around the other way, that means that we actually produce the same amount of energy but we only disturb four per cent of the land area, as compared to current techniques.
Secondly, we’re operating under a cap rock or a reservoir type system. Now what that means is we actually produce the gas in a confined environment, which then allows us to recover the gas. This is more typical of traditional oil and gas recovery and extraction techniques. So that gives us real advantages from the environmental point of view.
Thirdly, as part of our gas we also have other products that come with it, such as hydrogen which also with nitrogen for example, are the basic building blocks of ammonia or fertiliser. And so it’s not just a gas project, but also low cost electricity, low cost fertiliser and many other products that are essential for industry and our life as we live today.
Donna Sawyer: What is Liberty’s proposed technology and what advantages does it bring to the gas supply sector?
Andrew Haythorpe: Well it’s not so much that we have a proposed technology. What we’re really doing is searching around the world, collecting the very best of what’s available from a wide variety of industries. So we look at the oil and gas industry, we’re looking at what’s available in the electricity and power generating industry, the chemicals processing industry. And we’re putting all this together into a unique proposition, a unique project, where we get the very best and put it together.
So rather than being a new technology, it’s actually – we’re more like the apple of energy. And that is we get the best of what’s available; we repackage it and get better outcomes that meets all of our requirements, both from a society/community and from a business point of view.
Donna Sawyer: What advantages do your ground holdings offer in terms of location and ensuring a stakeholder interest is satisfied?
Andrew Haythorpe: Well we’ve had a terrific opportunity over the last five years. We actually started off with 64 thousand square kilometres of permit holdings and applications in Queensland. And we’ve actually whittled that down to the very best 5 thousand square kilometres, which is still a very large land holding. Now selection criteria are quite extensive, but it’s a combination of what’s below the ground, we’re looking for those good suitable sites. But also what’s above ground, what gives us the best business outcomes and that’s where we’ve got a real advantage. We think we’ve got the best land position for our business in the world.
Donna Sawyer: What are your project development timelines now?
Andrew Haythorpe: Well typically a large project like this and I’m calling still a $1.4 billion project large. Typically with a project like this, it’s two years of environmental permitting and approvals, background studies etc. and then about two years of construction and commissioning. So the answer from today is about four years. However, there has been history, in recent history, where you can actually speed up that process with the support and partnership with the Government.
Donna Sawyer: Where are you at in discussions with potential project financiers as well as off take customers?
Andrew Haythorpe: We’ve had a marked increase in interest just in the last few months from potential off takers and of course, off takers or customers are a pathway through to finance. And of course, the customers – potential customers that we’re talking to now, are really driven by the concerns and the difficulties they’re facing in locking in long term gas supply, at a reasonable cost. So of course, we come along with our project and the findings that we’ve shared with a community in the last few months, that we can produce a lot of gas for 20 and 30 year timeframes, at a very low cost.
So it’s a real opportunity for us and it’s a real opportunity for the customers. And of course ultimately for project finance, any finance package is also dependent on the customer off take. So we’re closing that loop as we move forwards.
Donna Sawyer: Andrew Haythorpe, thanks so much for the update on Liberty Resources.
Andrew Haythorpe: Thank you very much Donna, pleasure.
Ends
