$2.2million Funding Secured for Renewable Methane Demonstration

Highlights

• $2.2m non-dilutive funding from the APA Group and ARENA
• Renewable methane demonstration to be built on APA land at Wallumbilla gas hub
• Based on Southern Green Gas’ proprietary technology
• Could facilitate major new hydrogen export industry
• Now raising $600,000 in equity, with two venture capital groups committed in-principle

SGG has entered into agreements with leading Australian energy infrastructure company, APA Group (ASX: APA), for the funding and development of a $2.2 million project to demonstrate the production of renewable methane. Under the agreements, the project will receive $1.1 million in funding from ARENA, as part of ARENA’s Advancing Renewables Program. APA will be the recipient of this funding, and will match the ARENA funding with a further $1.1 million. APA has contracted SGG to design, build and test the project. The project is expected to take two years to complete, and will be located on APA land at the major Wallumbilla gas hub in southern Queensland.

Subject to the successful outcome of the demonstration project, SGG and APA intend to jointly develop commercial renewable methane projects. To facilitate this, SGG and APA have also entered into a Commercialisation Deed whereby APA will undertake the build-own-operate role, on an exclusive basis for ten years. SGG’s role will be to develop the projects, coordinate manufacture of process modules and secure customers for the methane.

The methane can be injected into APA Group’s east coast gas pipeline network, which Federal Energy and Emissions Reduction Minister Angus Taylor said could help decarbonise power supplies. “This type of innovative work is exactly what we need to see to grow our domestic hydrogen industry,” Minister Taylor said.

We now have two venture capital groups, Artesian Venture Partners and Victorian Clean Technology Fund, willing to invest. Subject to putting in place an acceptable shareholder agreement, they intend to invest $300-350k. Hence we are seeking the remaining $250-300k to fill out the funding round to $600,000. These funds will be directed towards further product and market development.

The views expressed herein are not necessarily the views of the Australian Government, and the Australian Government does not accept responsibility for any information or advice contained herein.

Renewable Methane Process

The process combines renewable hydrogen, made from water and solar energy, with CO2 extracted from the air. The CO2 extracted from the air offsets the CO2 emitted when the methane is used, thereby making the whole energy system carbon neutral.

The process is modularised, to facilitate mass manufacture and therefore minimise component and production costs. The project will involve a module as shown diagrammatically below.

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