By Sarah Byrne
FORTESCUE Metals Group is looking to run its mining fleet on gas and hasn’t ruled out the possibility of breaking into Western Australia’s gas market, according to company director of development Peter Meurs.
Speaking to Oil & Gas Australia before his presentation at the Australian Petroleum Production and Exploration Association Conference, Mr Meurs said the company’s recently completed Fortescue River Gas Pipeline was part of the company’s strategy to adapt as much of its mining infrastructure to gas as possible.
“It is a tragedy we are exporting gas and importing diesel,” he said.
Looking at the company’s future plans and strategy, Mr Meurs said the next step is to extend the pipeline to the Chichester hub and convert the facility to gas.
“This will increase our gas use to 30 terajoules per day and reduce our use of diesel to 500 million litres per year.”
Mr Meurs said there is also potential for the company to run its mining fleet on gas.
Explaining this concept, Mr Meurs said the company can substitute LNG in its trucks.
“That conversion is not totally efficient, you still need a fair bit of diesel, but the alternative to that is gas to liquids. The company would build a gas to liquids plant at Solomon and the Chichesters and go to 100 per cent gas.”
Diesel would be made from gas with a gas to liquids process, which would convert it entirely to gas, using around 100 terajoules of gas per day Mr Meurs explained.
Fuelling the company’s ships by constructing gas turbines inside the ore carriers was raised by Mr Meurs as another way the company may utilise gas in the future.
As a major energy user, Mr Meurs said FMG has not ruled out breaking into Western Australia’s gas market to supply gas to its mining projects.
“We are a major energy player, a major energy user. Join the dots. There may be some reason for us to look at gas resources that are close to us or in Western Australia that we could potentially use for our own energy use” he said.
Despite confirming Fortescue was interested in gas resources in Western Australia, Mr Meurs said there were no plans to pursue it at this stage.
Referring to the messages heard at the APPEA Conference, Mr Meurs said he agreed with Woodside Energy’s chief executive Peter Coleman in that the industry must get better at delivering mega projects in order to secure Australia’s future in the energy industry.
Australia’s mining and oil and gas industries could see big benefits if the mining industry used more gas instead of importing diesel, Mr Meurs said.
“There are a lot of smaller gas fields and gas opportunities that could be connected simply up to the Australian mining industry and they are a source of reliable, efficient, cost effective energy and that would be a great thing for Australia,” he said.
“The mining industry would benefit and the gas industry would benefit and it doesn’t in any way clash with our huge important LNG projects, it’s just another piece of the puzzle,” Mr Meurs added.
Fortescue worked with Duet Group and TransAlta for the construction of the 270 kilometre pipeline which was completed earlier this year and delivers gas to the power station at the company’s Solomon hub, which is owned and operated by TransAlta.
Capable of delivering 100 plus terajoules without compression and 300 terajoules if compressed, the pipeline can also be used by other companies working in the region.
Fortescue has reduced its diesel consumption from 750 million litres per year to about 580 million litres per year, with this first step.
“This opens up gas to the mining industry in the Pilbara,” Mr Meurs said.