MinRes seeks a partner in gas plant selldown
Mineral Resources wants a partner to buy into its onshore gas processing plant in Western Australia and is on track to make an investment decision on its Lockyer conventional gas project.
Mineral Resources says it is on the hunt for a partner to buy into its onshore gas processing plant in Western Australia, as the company awaits a decision by the state government on gas exports from the project.
MinRes said on Wednesday it was “well progressed” with selling down a 49 per cent share of a Pilbara haul road servicing its latest iron ore project, with a sale expected to close by the end of June.
The selldown would effectively allow the buyer to extract a toll on each tonne of iron ore sent down the haul road to Fortescue’s port facilities at Onslow.
The Chris Ellison-led company says it is also on track to make a final investment decision on its Lockyer conventional gas project by the end of the financial year, but any decision remains dependent on the state government giving permission for the company to export at least a portion of the gas produced.
“Engineering of the proposed gas processing facility is progressing according to plan and the long-lead equipment procurement process has commenced,” the company said.
MinRes has previously flagged a cost of about $850m on the plant, which would produce about 200 petajoules of gas from the onshore project.
MinRes has faced regular analyst questions over the last year about its cash generation and debt levels in the face of an expanding capital spending program, and the company said on Wednesday it was considering selling down an income stream from the gas plant.
Similar to its haul road sale, the buyer would not necessarily get an equity stake in the underlying project or offtake rights, just the right to extract a toll on gas produced from the plant in exchange for an upfront payment.
MinRes general manager of corporate development James Bruce told analysts on Wednesday discussions on the gas plant would focus on the infrastructure.
“We’re looking at this in a very similar manner to what we’ve done with the Onslow road,” Mr Bruce said. “It’s about partnering on the infrastructure. We would look at all sorts of partners for that. Hopefully someone with a big cheque book.”
MinRes was also looking at other options to liberate cash.
MinRes said construction of its Onslow iron ore was nearly complete, with first ore expected to be exported in June.
The company reported improving lithium prices late in the March quarter, selling a 22,000 tonne shipment for the equivalent of $US1300 a tonne for 6 per cent lithium concentrate, compared to a three-month average of $US1030.
MinRes shipped 2.5 million tonnes of iron ore in the period across its Pilbara and Yilgarn operations, realising an average $US98 a tonne.
MinRes closed up 28c, or 0.4 per cent, at $68.82.