Oz Evol LNG, Adaman Resources Sign LNG Agreement

Australian LNG distributor Evol LNG has signed a long-term LNG supply agreement with resources company Adaman Resources, it said June 17.

Evol LNG will supply LNG to Adaman Resources’ wholly-owned subsidiary Kirkalocka Gold SPV located in Western Australia. Kirkalocka gold mine is set to restart operation after more than a decade.  The mine will use LNG to fuel Zenith Energy’s 14.5 MW power station, with supply planned to commence from September 2019, Evol LNG said June 17 with offering any details about the agreement. 

Evol LNG and Wholesale manager, Nick Rea, said the use of LNG as an alternative to diesel will help minimise the mine’s carbon emissions.

“LNG produces 25% less CO₂ emissions than diesel, and during the initial six years of operation, the mine will avoid 50,000 metric tons of greenhouse gas emissions by fuelling its power station with LNG instead of diesel. This is the equivalent of keeping around 3,000 cars off the road,” said Rea.

Evol will build, own, operate and maintain the on-site LNG storage and vaporisation facility at the mine.

“Utilising LNG as an alternative to diesel-fired generation will significantly reduce our energy costs and exposure to volatile diesel prices. Based on the current diesel price, we estimate our energy costs to be reduced by more than A$13mn (US$9mn) during the first six years of operation,” Adaman Resources CEO, Craig Bradshaw, said.

Rea said Kirkalocka was their third major contract in the mid-west in recent years, and sees huge potential for growth in this region.

“The scarcity of gas pipelines and absence of grid power would otherwise force off-grid mines to use diesel for power generation, but we are able to provide a much better solution with LNG. It’s clean, safe, reliable and lower cost than diesel," Rea said.