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MEO Australia In Talks To Secure Long Term Methanol Sales For Northern Territory Project

MEO Australia (ASX: MEO) is actively engaged in negotiations for the long term sale of methanol from the first Tassie Shoal Methanol Plant offshore Northern Territory.

It is also considering broader strategic partnerships and is commissioning major updates of the third party engineering studies that underpin the technical design basis and financial cost estimates for both the Tassie Shoal Methanol (TSMP) and LNG (TSLNG) developments.

"The value of the Tassie Shoal development concept is crystallising for those parties that have considered the alternative development concepts for the surrounding resources," executive manager business development Robert Zammit said.

"The opportunity exists to commercialise regional stranded resources in a profitable way for all stakeholders. The complex series of negotiations currently underway are a pre-requisite to capturing the highest value opportunity for shareholders in developing the Tassie Shoal precinct."

MEO believes that long term sales will provide the revenue certainty required to support external financing requirements for the project's development.

It is also exploring broader strategic partnerships across the midstream and upstream value chain.

This includes considering the implications of suitable gas being available from MEO equity sources, including the discovered Heron and Blackwood gas discoveries currently being appraised as well as potential gas from equity prospects, such as the Breakwater prospect in WA-454-P.

Planned appraisal of regional gas discoveries could also provide the opportunity for third party gas supply.

Tassie Shoal Methanol and LNG project

MEO has developed detailed pre-Front End Engineering and Design studies for two 1.75 million tonne per annum methanol plants to be located at Tassie Shoal as well as preparing and costing development plans for an adjacent 3 million tonne per annum liquefied natural gas plant.

TSMP combines established proven technology in an innovative way to address the commercialisation challenge for regional gas discoveries which have high carbon dioxide content.

The methanol process utilises the carbon dioxide in the feed gas stream in the production of methanol avoiding expensive geo-sequestration costs and difficulties in alternative development scenarios.

Its proximity to the gas fields also mitigates many of the capital cost drawbacks of an onshore or deep water based development.

The TSLNG project provides a further alternative commercialisation path to land based LNG for any of the remote gas resources in the region.

This is designed on the basis that high value liquids would be removed from the raw gas at the field location and dry gas piped to Tassie Shoal for processing into LNG.

The proposed development plan significantly reduces project costs by reducing pipeline distances and allowing the plant to be fabricated in a low cost South East Asian location for installation in one module.

MEO believes this could reduce LNG project development costs by in excess of US$2bn compared to floating LNG or land based development.

Both projects have being granted Major Project Facilitation Status by the Federal Government Department of Infrastructure and Transport, ensuring that Commonwealth approval processes are coordinated between the relevant state and territory government approval processes.

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