Global infrastructure fund, I Squared Capital (ISQ), has acquired Perth-based Clean Energy Fuels Australia (CEFA) and is backing CEFA to develop an Energy Transition Platform focused on reducing the carbon footprint of energy-intensive industries in Australia. The platform is expected to invest up to $500 million on assets providing low-carbon and renewable solutions.
The Energy Transition Platform’s initial focus is the Western Australia mining sector, which currently consumes 4.8 billion litres of diesel per year to meet its power generation and locomotive needs.
The Energy Transition Platform will offer an integrated solution to remote mining customers to meet their evolving energy needs.
This will include end-to-end logistics for Liquefied Natural Gas (LNG) for power generation, innovative solutions for utilising LNG in place of diesel in heavy mine haul vehicles, re-deployable solar solutions which can adapt with the unique requirements of mining operations with shorter mine lives, and the transition towards green hydrogen.
Having secured Silver Lakes Resources’ Deflector Gold Mine as its foundation customer, CEFA has made a positive Final Investment Decision for the Mid-West LNG Hub and has begun the phased construction of the facility.
First LNG deliveries are expected to commence during the third quarter of 2021.
CEFA’s Romano Bernhard said that the Mid-West LNG Hub at Mount Magnet is planned to have a capacity of up to 100,000 tonnes per annum and will be built across multiple phases.
“In addition, CEFA has secured a site in Port Hedland – which will serve as CEFA’s second LNG Hub in the Pilbara region. Across these hubs, CEFA aims to build modular and flexible LNG liquefaction plants with cumulative capacity of up to 200,000 tonnes per annum,” he said.
“CEFA estimates that over 25 years of operation, these projects could displace around 6 billion litres of imported diesel with domestically sourced natural gas and reduce customers’ carbon dioxide (CO2) emissions by over 4 million tonnes.”
The Mid-West LNG Hub has been recognised as a significant regional development by the Western Australian Government and is the first such project to have been approved under new State Government planning reform legislation supporting economic recovery from COVID-19.
CEFA’s Basil Lenzo commented that they are excited to see the intent from the regional mining community to adopt LNG as a lower emission fuel, providing a greener alternative to diesel with up to 25 per cent lower greenhouse gas emissions.
“LNG can be materially cheaper than diesel with no upfront capex needed from the customer’s perspective. New mining projects are incorporating LNG as a base case while operating mines are seeing the benefits of switching to LNG,” Mr Lenzo shared.
“With a phased modular development, CEFA is partnering with the mining companies in their journey to reduce their carbon footprint.”
CEFA’s David Trembecki added: “The Mid-West LNG Hub is the first building block in the Energy Transition Platform that will support the decarbonisation of the Australian economy.”
“It is a step towards achieving greater energy independence for the nation as LNG is produced from domestic gas as opposed to diesel which is largely imported. The Mid-West LNG Hub will create the impetus for future CEFA development projects and pave the way for sustained emissions reductions in years to come,” he said.
*Above image: Image taken at the CEFA customer LNG storage facility at Port Wakefield in South Australia, which is similar to those that would be developed as part of the Mid-West LNG Hub project, courtesy of CEFA.