Southern Green Gas has entered into a joint development agreement with APA Group, which requires the parties to work together to develop renewable methane projects.
APA’s proposed role is to build, own and operate the infrastructure assets associated with the projects while Southern Green Gas’ role is to develop the project and sell the methane gas.
Renewable methane can be made by using electrolysis to produce hydrogen using solar energy. Carbon is extracted directly from the air. The hydrogen and carbon are then combined to produce methane. The carbon extracted balances the carbon emitted when the methane is used, therefore making the methane both renewable and carbon neutral.
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The parties will initially work on a demonstration project, to be sited on APA’s land near Dalby in Queensland. On the site is one of APA’s compressor stations, which will allow methane gas from the project to be injected into the gas pipeline system.
Subject to the outcome from the demonstration project and, ultimately, the signing up of customers for the end product, the parties intend to jointly develop a world-scale renewable methane project.
The agreement is non-binding and requires the parties to negotiate in good faith and use reasonable endeavours to conclude binding agreements.
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Southern Green Gas’ managing director Rohan Gillespie says the reason the company has chosen methane as the carrier for renewable energy and especially renewable hydrogen is the ability to utilise the existing gas infrastructure system.
“The existing gas pipeline network allows us to access customers here in Australia, as well as export customers through the existing liquefied natural gas (LNG) system,” he says.
“APA, being the owner and operator of over 15,000 kilometres of high-pressure gas pipelines in Australia, is the logical partner for Southern Green Gas. APA has already expanded into renewable energy generation from wind and solar, which is important as the majority of the renewable methane projects will be solar farms. We are delighted to be partnering with them.”