Brisbane, Australia – 27 August 2024 | Queensland Pacific Metals Ltd (ASX:QPM) ("QPM" or "the Company") is pleased to announce that its subsidiary, QPM Energy Pty Ltd ("QPME"), has executed non-binding term sheets with RATCH Australia Corporation ("RAC") and North Queensland Gas Pipeline ("NQGP") for new commercial agreements that will significantly reduce operating costs and enhance QPME’s financial robustness. These agreements cover the dispatch rights for the Townsville Power Station ("TPS") and gas transport and storage services on the NQGP.
Highlights:
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Commercial Agreements: QPME has reached key commercial terms with RAC and NQGP for new contracts that will come into effect when existing arrangements expire on 1 July 2025. The agreements include:
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Dispatch rights to 100% of the capacity of TPS’s 160MW gas turbine generation unit.
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Gas transport and storage services on the NQGP.
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Cost Reduction: The new terms will result in an 83% reduction in annual fixed charges compared to existing contracts, transforming QPME into a financially robust entity with the capacity to accelerate gas production growth plans. If these agreements had been in place during FY2024, QPME’s financial performance would have improved by over $30 million.
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Long-Term Agreements: Both the TPS Dispatch Agreement and the NQGP Gas Transportation Agreement are set for an initial term of 10 years, with a review event at 3 years. The new agreements include provisions for sharing excess electricity revenue generated above QPME gas supply, TPS operating, and NQGP transport costs.
David Wrench, Chief Executive Officer of QPM, stated: “We are very pleased to have agreed the key terms of new contracts with two of our important partners and stakeholders, NQGP and RAC. This achievement, on the first anniversary of our acquisition of the MGP, caps 12 months of hard work by the QPME team and is a key milestone marking the successful reinvigoration of the operational and commercial foundations of the business.
The new commercial arrangements will be transformational for QPM Energy, significantly de-risking the business. A sustainable, stable and profitable business will drive a range of new growth initiatives as we develop MGP into a tier 1 energy asset.”
Dyno Nobel Shut Down and Contract Transition:
During Q1 2025, Dyno Nobel will undertake a major maintenance program at their Moranbah Ammonium Nitrate facility, leading to reduced gas nominations. QPME will have significant additional gas available for electricity generation during this period. As a result, the existing TPS and NQGP agreements will be extended until 31 March 2025, with a planned TPS shutdown for a major overhaul in Q2 2025.
For further information, please contact:
David Wrench
Chief Executive Officer
+61 7 3517 5900
[email protected]
About us:
About Queensland Pacific Metals Ltd:
Queensland Pacific Metals Limited (QPM, formerly Pure Minerals Limited) is an Australian company focused on development of Townsville Energy Chemicals Hub project (TECH Project). TECH Project will produce nickel sulfate, cobalt sulfate, high purity alumina and other by-product. During the year Product marketing of the key battery chemicals to be produced by the TECH Project, nickel sulfate and cobalt sulfate, was a key focus for QPM.
Contact details:
Jane Morgan
Jane Morgan Management
Investor & Media Relations
[email protected]
