QPM Secures Four-Year Dispatch Rights for Moranbah Power Station

Carbon Logica Pty. Ltd. has agreed to grant the operating and dispatch rights for the Moranbah Power Station (MPS) in the namesake Australian town to QPM Energy Ltd.

QPM said in a statement Carbon Logica would purchase the 12.8-megawatt (MW) gas-fueled station from Sustainable Energy Infrastructure Pty. Ltd. (SEI) and lease it to QPM. QPM can acquire the station after the four-year operating agreement with Carbon Logica ends.

“The MGP gas gathering network is directly connected to the MPS and supplies up to 3.2TJ/day [terajoules a day] when the power station is operating at full load”, Brisbane, Queensland-based QPM said in the statement on its website, referring to the Moranbah Gas Project (MGP).

“Under existing legacy commercial contracts the MGP buys ~3MW of electricity from SEI to power the gas field”, QPM said. “QPM can elect to supply gas to the MPS to reduce overall electricity costs”.

It plans to use waste coal mine gas from the Moranbah coal seam gas project to fuel the station.

“Following completion of the Transaction, QPM will have operational and dispatch control of the MPS including the capability to buy electricity directly from the grid at the National Electricity Market spot price”, QPM said. “This gives QPM the flexibility to buy electricity at low to negative pricing during the day and generate electricity for self-consumption and export at other times.

“As such, the MPS has the ability to deliver both increased revenue and reduced operating costs for QPM as the existing legacy contracts with SEI will be terminated”.

QPM expects electricity cost savings of over AUD 500,000 ($316,200) a month, or five percent overall, through the agreement with Carbon Logica, a carbon abatement company catering to the coal mining industry.

QPM will pay Carbon Logica, also based in Brisbane, about AUD 10.5 million over the four years.

QPM expects to complete the transaction by the end of 2024.

Last year QPM bought the Moranbah Project in Australia's Bowen Basin from AGL Energy Ltd. and Arrow Energy Group for AUD 5 million.

"The acquisition of the Moranbah Project transforms QPM into the 6th largest domestic gas producer listed on the ASX [Australian Securities Exchange]", QPM said in a press release August 25, 2023.

The project holds estimated proven and probable reserves of 318.7 billion cubic feet gross of gas, up 38 percent, according to a QPM update April 29, 2024. The reserves sit in petroleum leases 191, 196, 223 and 224, collectively referred to as the Moranbah Project, which has been in production since the 2000s.

The purchase comes with the right to send gas via the North Queensland Gas Pipeline (NQGP), which can carry 108 TJ per day. The Moranbah-Townsville pipeline is owned by Palisade Investment Partners Ltd. but operated by AGL and Arrow Energy through a joint venture.

The Moranbah Project supplies gas to the Townsville Power Station (TPS) and industrial businesses in north Queensland.

On December 4, 2024, QPM announced a 10-year agreement with RATCH Australia Corp. to obtain dispatch rights for 100 percent of the capacity of TPS’ 160-MW gas turbine generation unit after existing arrangements expire.

“This agreement allows QPM to supply gas to the power station and dispatch the electricity generated into the National Electricity Market”, QPM said.

QPM also said it had inked a 10-year agreement enlisting NQGP for gas transport and storage services.

“The spot electricity price in the National Electricity Market is becoming increasingly volatile as more variable renewable generation is added to the network”, QPM said in a statement. “The mismatch between the timing of renewal generation and demand results in significant swings in market prices, particularly during late afternoon and early evening as solar generation falls away and household electricity demand increases rapidly.

“QPM’s strategy is to develop additional gas-fired power generation capacity that will be dispatched to provide support to the market during these events and capitalize on the very strong market prices during this part of the daily price cycle”.

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