Empire Energy Group (ASX:EEG)
has announced its strategic acquisition of AGL Limited's Rosalind Park Gas Plant (RPGP) for a total consideration of $2.5 million in cash.
Empire Energy anticipates substantial cost savings exceeding $30 million through this acquisition when compared to the alternative of constructing new midstream infrastructure. Furthermore, this move is expected to reduce the lead time by approximately 12 months, expediting the timeline for gas sales, which are projected to commence in 2025, subject to regulatory approvals and final investment decision (FID).
The plant has a design capacity of 42 TJ (terajoules) per day and it played a vital role in supporting AGL's Camden Gas Project until decommissioning in August 2023. Empire Energy conducted a rigorous technical due diligence process, confirming the plants fitness for purpose and alignment with the company's requirements for processing low CO2 Beetaloo gas for supply into the Northern Territory market and Australian East Coast markets from the EP187 Carpentaria Pilot Project.
Contingent on regulatory approvals and a positive FID for the Carpentaria project, the plant will undergo refurbishment and be reassembled at the Carpentaria Pilot Project in 2024. Along with the expected cost savings, the acquisition will allow an expedited timeline to first gas along with the ability to handle increased gas volumes.
Empire Energy is also collaborating with APA Group under its Initial Agreement, which may lead to the funding of engineering and construction of midstream infrastructure assets upon obtaining further approvals and formal agreements.
Managing Director Alex Underwood emphasised the significance of this development, stating, "This is a material development for Empire, its shareholders and all stakeholders involved in the development of the Beetaloo Sub-basin, and the substantial economic benefits and energy security that Empire’s Beetaloo project can provide for all Australians."
With energy security being a critical concern for the Northern Territory market, Empire's Carpentaria Pilot Project aims to address this issue while generating substantial cash flow and demonstrating the long-term viability of development wells in the Beetaloo Basin. Additionally, the project aligns with environmental goals by reducing emissions resulting from test gas flaring.
This acquisition marks a significant milestone in Empire Energy Group's journey towards advancing the Carpentaria Pilot Project and strengthening its position in the energy market.