Why Liontown Resources Awarded a Gas Supply Contract for Kathleen Valley Lithium Project
Liontown Resources Limited (ASX: LTR) has recently announced that it has awarded a contract for the supply of liquefied natural gas (LNG) to Mid-West LNG Pty Ltd, a subsidiary of Clean Energy Fuels Australia (CEFA). This contract is a crucial step for Liontown's 95 MW Hybrid Power Station at the Kathleen Valley Lithium Project, which aims to be one of Australia's largest off-grid wind-solar-battery storage renewable energy facilities.
Key Highlights:
The LNG supply contract will commence in January 2024, coinciding with the planned early commissioning activities.
The contract ensures renewable energy penetration in line with Liontown's goal of being at least 60% renewably powered from the start.
The power station at Kathleen Valley combines wind turbines, solar panels, battery storage, diesel, and gas-fired generators. It is designed to operate primarily on renewable energy during periods of high wind and solar power availability.
The LNG will be produced at CEFA's Mount Magnet Mid-West LNG Hub, located approximately 370 kilometers from Kathleen Valley.
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The Hub is connected to the Mid-West Gas Pipeline, providing access to natural gas fields in the mid-West and North-West.
The 15-year supply contract aligns with the Zenith Power Purchase Agreement and offers flexibility in terms of quantities and access to additional capacity as needed throughout the contract period. This arrangement allows Liontown to meet its renewable energy targets while ensuring 100% thermal power redundancy for the operation. The contract includes fixed and variable charges for gas supply, liquefaction, and transportation.
The LNG supply will begin in January 2024 to support the early plant commissioning activities as planned.
Liontown's Managing Director and CEO, Tony Ottaviano, expressed confidence in CEFA's ability to provide high-quality LNG for the Kathleen Valley project, ensuring the project progresses as scheduled.
Ottaviano stated, "We are focused on our renewable energy target of at least 60% at start-up delivered through wind, solar, battery storage, and thermal components of LNG generation. Our LNG supply contract with CEFA enables reliability of supply, and through an 'engine off' mode, we will be able to operate from 100 percent renewable energy. "
Liontown remains committed to delivering on its environmental, social, and governance (ESG) goals while establishing a leading position in terms of carbon emissions from the beginning of the project.
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