Strandline Resources’ (ASX: STA) power requirements have been finalised for its flagship Coburn mineral sands project in Western Australia, with the company inking a binding supply agreement with Contract Power Australia.
The 15-year electricity supply agreement paves the way for Contract Power to build, own, operate and maintain a 32 megawatt (MW) hybrid gas and renewable energy solution for the project.
As a result, Strandline noted it will pay less for power than outlined in the definitive feasibility study that was released mid-last year.
The power station for Coburn will be located near the mineral separation plant. It is designed to be able to supply up to 15MW at maximum demand capacity and average at 10MW.
Contract Power has been providing remote power to mines and towns for more than 30 years. Its solutions include renewable energy and battery systems combined with traditional fuel to create hybrid plants that have reduced fuel requirements and less carbon emissions.
Strandline managing director Luke Graham said the contract marks another “key step” in the company’s plans to bring Coburn online.
Finalisation of the agreement with Contract Power follows on from the initial agreement in November.
The plant will operate using a mixture of gas and renewable energy, with liquified natural gas to be supplied by the Woodside-EDL JV.
This joint venture comprises Woodside Petroleum’s (ASX: WPL) subsidiary Woodside Energy and EDL LNG Fuel to Power.
Under the deal, Woodside-ED JV will truck LNG from Woodside’s Pluto LNG truck loading facility near Karratha to Coburn for an initial 10 years.
Close to securing development funding
Strandline is close to securing the final $100 million required to develop Coburn, with discussions ongoing with shortlisted lenders to secure the “most attractive commercial terms”.
The company plans to finalise its finance options “as soon as possible”.
More than half of the project’s capital expenditure requirements have already been sourced by way of a $150 million loan from the Australian Government’s Northern Australia Infrastructure Facility.
The definitive feasibility study estimates it will require $260 million to bring Coburn online.