Delorean Corporation Secures Major Biomethane Gas Supply Deal with Origin Energy
Delorean Corporation (ASX: DEL) has scored another major breakthrough for the Australian bioenergy industry with the completion of a binding gas sales agreement with leading utility Origin Energy (ASX: ORG) for the long-term supply of renewable natural gas, also known as biomethane.
Under the agreement, Origin will purchase up to 200 terajoules of biomethane per annum from Delorean’s SA1 facility in South Australia on a take-or-pay basis for eight years from expected first gas in April 2026 until March 2034, with a further two-year option for Origin to March 2036.
The renewable gas offtake agreement includes the purchase of Renewable Gas Guarantees of Origin (RGGOs) from the SA1 facility to reduce scope 1 emissions in the hard to abate sector.
ARENA Payment
Delorean’s biomethane offtake agreement with Origin satisfies a key condition precedent for progressive payments of up to $6.1 million under the federal government-backed Australian Renewable Energy Agency (ARENA) grant funding.
The company expects the first milestone payment of $2.7m from ARENA in October 2025.
The transaction also locks in between $30 million and $40m in revenue over the full term, factoring in CPI escalations and the 2-year extension.
Bankability Confirmed
“The long-term nature of this renewable gas offtake confirms the bankability not just of SA1, but of Delorean’s next build/own/operate bioenergy project and those after that,” managing director Joe Oliver said.
The Origin deal follows Delorean’s recent agreement with Supagas for the long-term offtake of biogenic food-grade liquid carbon dioxide (LCO2) from the SA1 bioenergy facility.
Delorean has now locked in revenues for biomethane and LCO2 with investment-grade counterparties of as much as $55m, with additional revenues from gate fees and carbon credits for the acceptance of organic waste and the sale of biofertiliser from the project over the asset life.
Bioenergy Plant
Delorean owns 100% of the SA1 Salisbury bioenergy plant, which is currently under construction in the Northern Adelaide Food Park.
Stage 1 of the project will annually process 70,000 tonnes of organic waste streams for the nominal production of as much as 210TJ of biomethane per annum, which it will then export to the Adelaide gas network under a gas offtake agreement with Australian Gas Infrastructure Group.
A proposed second stage has the potential to increase this to 125,000tpa under the current development approval.
SA1 will produce six different products and revenue streams including biomethane, renewable LCO2, carbon credits, RGGOs, liquid fertilisers, and gate fees.