GAS & MES sign MOU for CNG Virtual Pipeline Infrastructure
GAS & MES sign MOU for CNG Virtual Pipeline Infrastructure

Brisbane, Nov 10, 2022 AEST (ABN Newswire) - State Gas Limited (ASX:GAS) (STGSF:OTCMKTS) has entered into a Memorandum of Understanding with Mine Energy Solutions Pty Ltd (MES) securing access to compressed natural gas (CNG) Virtual Pipeline infrastructure.

As previously announced, State Gas is planning to truck compressed natural gas to the market to commercialise its proven gas resource at Reid's Dome (PL 231), as soon as possible. The transport of compressed gas by truck, creating a 'virtual pipeline', is a globally recognised and safe process for the movement of gas. State Gas will be utilising this process to transport the gas to the pipeline infrastructure network approximately 60km away.

The gas, once produced, will be compressed and dehydrated at site to pipeline standard and loaded into new generation high pressure carbon fibre cylinders typically employed in the aerospace industry and which are compatible with hydrogen for transport by truck to the pipeline.

MES is a Queensland based technology developer which has successfully demonstrated the conversion of mobile mining equipment to operate on domestically produced gas, thereby displacing up to 80% of imported diesel in this equipment providing an immediate decarbonisation benefit. As part of the conversion, carbon fibre cylinders are installed on the equipment in a unique configuration allowing the equipment to operate safely and efficiently in all open pit mine site operations. MES and State Gas are collaborating to develop the "Virtual Pipeline" solution for State Gas.

"I am delighted to enter into this alignment with MES" said State Gas Executive Chairman Mr Richard Cottee. "MES is a locally based company finding innovative ways to do things better, just like State Gas."

"The demand for gas has never been greater and attention is moving to ensuring every possible molecule is used. I see a big future for CNG as a means of capturing gas that is otherwise too far from the market or pipeline infrastructure", Mr Cottee added.

MES Chief Executive Mr Adrian Abbott agreed: "Our Board is committed to assist the resource industry to decarbonise, and collaborating with State Gas will assist some of our clients to achieve their carbon reduction commitments through the use of domestically produced gas."

MES and State Gas share aligned environmental and commercial objectives which this project will catalyse.

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About State Gas Limited

State Gas Limited ASX:GASState Gas Limited (ASX:GAS) is a Queensland-based developer of the Reid's Dome gas field, originally discovered during drilling in 1955, located in the Bowen Basin in Central Queensland. State Gas is 100%-owner of the Reid's Dome Gas Project (PL-231) a CSG and conventional gas play, which is well-located 30 kilometres southwest of Rolleston, approximately 50 kilometres from the Queensland Gas Pipeline and interconnected east coast gas network.

Permian coal measures within the Reid's Dome Beds are extensive across the entire permit but the area had not been explored for coal seam gas prior to State Gas' ownership. In late 2018 State Gas drilled the first coal seam gas well in the region (Nyanda-4) into the Reid's Dome Beds and established the potential for a significant coal seam gas project in PL 231. The extension of the coal measures into the northern and central areas of the permit was confirmed in late 2019 by the Company's drilling of Aldinga East-1A (12 km north) and Serocold-1 (6 km to the north of Nyanda-4).

State Gas is also the 100% holder Authority to Prospect 2062 ("Rolleston-West"), a 1,414 km2 permit (eight times larger than PL 231) that is contiguous with the Reid's Dome Gas Project. Rolleston-West contains highly prospective targets for both coal seam gas (CSG) and known conventional gas within the permit area. It is not restricted by domestic gas reservation requirements.

The contiguous areas (Reid's Dome and Rolleston-West), under sole ownership by State Gas, enable integration of activities and a unified super-gasfield development, providing economies of scale, efficient operations, and optionality in marketing.

State Gas is implementing its strategic plan to bring gas to market from Reid's Dome and Rolleston-West to meet near term forecast shortfalls in the east coast domestic gas market. The strategy involves progressing a phased appraisal program in parallel with permitting for an export pipeline and development facilities to facilitate the fastest possible delivery of gas to market. State Gas' current focus has been to confirm the producibility of the gas through production testing of the wells.




Lucy Snelling
Head, Corporate and Commercial

Richard Cottee
Executive Chairman

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State Gas Limited

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