Technology Metals Australia has formed an agreement with APA Group for the supply of gas to the Gabanintha vanadium project in Western Australia.
Under the agreement, APA will develop a 152-kilometre gas pipeline that links to the project in the Mid West region.
In return, Technology Metals Australia would enter a take or pay tariff over a period of time linked to the life of the Gabanintha project.
This pipeline is smaller than what APA Group originally proposed in a definitive feasibility study for the project. It will, however, result in lower gas transportation charges.
Its location will give Technology Metals the opportunity to secure gas from the Perth Basin at a competitive price.
The two companies are discussing the transaction, with APA having agreed to an exclusivity period on negotiating transportation services.
Technology Metals managing director Ian Prentice said the agreement positioned Gabanintha to source gas from the emerging Perth Basin.
“This agreement (will provide) low risk delivery of gas to the project, cost reductions compared to the definitive feasibility study as well as the opportunity to source gas from the Perth Basin gas fields,” Prentice said.
“We will be working together to develop a reliable energy solution for the Gabanintha project, (representing) another key milestone as we progress the development of this world-class vanadium project.”
Under the transaction documents, the parties will form a gas transportation agreement, development agreement to design and construct the pipeline and access licences required for the proposed pipeline route.