Trucking towards energy collaboration

While collaboration has long been touted as integral across all levels of the mining value chain, particularly at a small- cap and mid-tier level where explorers join forces to realise dreams of becoming producers, collaborative projects branching into other sectors have proved less common.

Enter promising developments in the liquefied natural gas (LNG) sector which have opened up new avenues for partnerships between the oil and gas and mining industries, two powerhouses of the Australian economy.

Speaking exclusively to National Mining Chronicle, Woodside Chief Operations Officer Meg O’Neill said the development of new technologies for energy distribution, accompanied by the resources sector’s desire for cleaner fuel alternatives, was encouraging the two sectors to work more closely together.

“With new technologies and the changing marketplace, there are new avenues of collaboration opening up between the sectors in Australia, and Woodside wants to be at the forefront of that,” she said.

As part of this drive to promote collaboration, Woodside recently opened a new LNG truck-loading facility at its Pluto LNG project near Karratha.

The facility is currently capable of delivering 15 terajoules per day of LNG, resulting in each triple road train configuration carrying the equivalent of more than 80,000L of diesel.

According to Ms O’Neill, based on this initial capacity, replacing diesel with LNG could reduce lifecycle greenhouse gas emissions by more than 120,000 tonnes per year. The facility’s capacity can be doubled by moving to 24-hour operations and further expanded if necessary to meet future market demand, with the initial focus on supplying LNG to mining operations and communities in the Pilbara, Kimberley and Gascoyne regions.

Ms O’Neill said the Pilbara was an ideal hub for an LNG fuels market, with highly reliable LNG processing facilities located close to large-scale mining operations and port infrastructure.

“The Pluto LNG truck-loading facility is a further demonstration of our commitment to supplying domestic gas and highlights Woodside’s drive to find new markets for our cleaner LNG,” she said.

“Around three billion litres of diesel are imported into the Pilbara every year, mainly for the mining industry.

“Woodside believes that by collaborating with the mining industry, LNG produced here in Western Australia can replace higher-emissions fuels, delivering environmental benefits while supporting the growth of local industries and creating new markets for locally produced LNG.”

Mineral sands explorer and developer Sheffield Resources has been the first cab off the rank as the foundation customer for the enterprise, securing large volumes of LNG for its Thunderbird project in the Kimberley.

“We are proud to be a foundation customer,” Sheffield Resources Managing Director Bruce McFadzean said.

“The real benefits are about our communities and our people. Many say we should add value to our natural resources in Australia, and I wholeheartedly agree. By taking LNG from Pluto and using it at Thunderbird, we will create quality products for export to the world.

“This will create jobs for hundreds of people in the Kimberley, export revenue for Australia and financial returns for our investors.”

Mr McFadzean was confident the truck-loading facility would prove a boon for WA’s North West and expand to help other businesses and industries for years to come.

Building on the expected success of this initial enterprise, and in addition to a downstream partnership with renewable energy producer EDL energy which looks to offer mining clients gas facility storage and vaporisation, gas-fired power generation and renewable generation capabilities, Woodside’s long-term plan is for the truck-loading facility to support the transition to cleaner fuels for trucks and trains in the Pilbara’s heavy transport sector.

This would bring a change to resources production which Woodside has already been busy promoting in the export space.

Last year saw the conclusion of the Green Corridor joint industry project, in which the gas producer joined forces with other resources giants to assess the commercial feasibility of LNG-fuelled iron ore bulk carriers on the trade route from the Pilbara to Asia.

Woodside’s partners in the Green Corridor project included Rio Tinto, BHP and Fortescue Metals Group.

Ms O’Neill said there was an opportunity for WA to become a global leader in LNG fuels on the back of new emissions regulations set to be introduced for the global shipping industry from next year.

“From January next year, all ships globally will need to comply with the International Maritime Organisation’s (IMO) tighter restriction on the sulphur content of marine fuels,” she said.

“We know LNG easily meets the new standard and is much cleaner than the diesel and heavy fuel oil historically used in shipping. Globally, the IMO deadline will no doubt cause disruption for the shipping industry. For Western Australia, it creates opportunity.

“We have world-class LNG facilities close to busy export ports that ship WA’s resources to the world, and the successful Green Corridor collaboration has demonstrated the feasibility of this opportunity.

“LNG fuelling for international shipping could be a significant new industry for WA, supporting jobs on bunkering vessels and driving emissions reductions.”

In 2017 Woodside was able to deliver the first milestone for LNG-fuelled shipping in Australia when it launched Siem Thiima, an LNG-fuelled ship that operates full-time from Dampier, showcasing the performance and benefits of LNG.

Image: Each road train is able to carry the equivalent of more than 80,000L of diesel fuel.

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