May 24, 2016

Pentland bioenergy proponents in EPC contract talks

Pentland bioenergy proponents in EPC contract talks PHOTO: RDA Director Kevin Mann assesses the progress of specially bred super sweet sorghum at the Pentland trial site.

Proponents of a planned $800 million bioenergy project at Pentland in North Queensland aim to reach financial close and begin tendering out work packages in the third quarter of this year.

Renewable Developments Australia (RDA) recently received a $3 million grant from the Australian Renewable Energy Agency (ARENA) to help build the business case for the facility, which would use sorghum and sugarcane to produce bioethanol.

The project is expected to create 500 jobs at the peak of a 27-month construction process and up to 200 positions once operational.

RDA company secretary Owen Self (pictured below) said the group was in negotiations with an engineering, procurement and construction contractor for the project.

RDA also recently sought expressions of interest from the Townsville and Charters Towers manufacturing sector as it lays the groundwork to start releasing work packages.

“The intent of that was to identify who in the local area has the capacity and appropriate skills to be included in the panel for subsequent tenders,” Mr Self said.

The company has partnered with major international ethanol players Tomsa Destil and Beta Renewables for the higher-level engineering of first and second-generation ethanol plants for the project.

Mr Self said also RDA had presold 100 per cent of the planned Pentland offtake to an international distributor.pentland bioenergy - owen self2

“Until financial close happens there is no guarantee, but everything seems to be lining up extremely well and I would say, with a little bit of a push, this will get over the line and there will be a major project in Queensland funded by the private sector that will have a major impact on international bioenergy supply,” he said.

“More importantly it has the potential to create a massive export industry for Queensland and meet the biofuel targets set by legislation in Queensland.”

ARENA chief executive officer Ivor Frischknecht described the project as having the potential to be a landmark development for Australia’s bioenergy industry.

“The plant is designed to produce up to 350 million litres of fuel-grade bio-ethanol per annum, which would increase Australia’s production by 80 per cent,” he said.

“The fuel is earmarked for sale under a proposed offtake agreement with a global agriculture and energy corporation and export through the Port of Townsville.”

Mr Frischknecht said the anticipated fuel price could be competitive with petrol, making ethanol a much more viable long-term renewable fuel.

RDA has been trialling crops to feed the ethanol plant year-round and plans to use biomass waste to run two 16-megawatt co-generation power plants at the site.

Mr Self said the group had been working on the proposal since 2004, beginning with an idea to use waste straw to produce electricity.

This has evolved to an integrated model that will see RDA producing its own crops of specially bred super sweet sorghum and sugarcane to produce ethanol, giving it control over supply and price factors.

Mr Self said RDA had 60-year leases on about 66,000ha of land and envisaged having about 10,000ha under farm production for the first stage of the project, in addition to the industrial production site.

“As part of the due diligence process we have done the appropriate drilling and study to demonstrate we have sufficient water to address the needs of 10,000ha under planting and a 340-megalitre plant,” he said.

RDA was negotiating with SunWater to secure additional water rights for future expansion, he said.

Mr Self said RDA was about 70-80 per cent through the development process required to bring the Pentland bio-energy project to financial close.

“We are now entering the due diligence phase where all the preliminaries are signed; costings, land use approvals and so on will be reviewed by external specialist consultants; then when that is complete the due diligence-approved  proposals will be presented by our investment advisors – NAB –  to private equity investors and debt providers,” he said.

More at http://rdaust.com/

 

 

 

 

 

 

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