WA Kaolin rises on signing 15-year LNG supply agreement for Wickepin Kaolin Project

WA Kaolin rises on signing 15-year LNG supply agreement for Wickepin Kaolin Project

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WA Kaolin Ltd (ASX:WAK) has signed a 15-year contract for the supply of Liquefied Natural Gas (LNG) for the company’s Wickepin Kaolin Project with Mid-West LNG Pty Ltd, (MWLNG) a group company of Clean Energy Fuels Australia (CEFA). The supply of LNG will be used to fire the rotary kiln at Wickepin that dries the kaolin ore, which is the first step in the company’s proprietary K99 dry processing method. Investors have responded positively with shares up more than 9% in early trade to 20.2 cents. This contract, which includes the supply of commissioning gas from September 1, 2021, to the end of 2021, will commence on January 1, 2022, and will run for 15 years with reviews at year 5 and year 10, and provides for two options to extend for a further five years respectively. It is valued at around $22 million over the 15-year period and provides for the storage and re-vapourisation infrastructure, including delivery of LNG by a virtual pipeline. “Agreement vital to project development” WA Kaolin CEO Andrew Sorensen said: “We are thrilled to have entered into a 15-year contract with CEFA, one of WA’s leading energy solution providers. “As we continue to progress our Stage 1 work program towards our target to be producing by year-end 2021, it is vital for our development program that we lock in such important long term supplier agreements like this. “The Stage 1 work program at Wickepin continues on track and within budget and I look forward to providing the market with a further update of progression from onsite shortly.” Mount Magnet LNG Hub CEFA provides integrated solutions developing small scale LNG infrastructure assets for remote mining operations and communities within Australia and is investing in new production plants and associated LNG infrastructure to provide a lower emissions fuel to the rural regions of Australia. Through Mid-West LNG Pty Ltd, CEFA is building a new LNG plant in Mount Magnet, around 600 kilometres north of Wickepin, and WAK will be the second customer supplied from this new facility. The Mount Magnet LNG Hub is expected to become a $100 million investment when the site is completely built out with the ability to supply in excess of 500 tonnes per day of LNG.

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