Comet Ridge Advances Mahalo Gas Hub FEED with Strong Pilot Results and Funding Talks
Comet Ridge Limited reports significant progress on its Mahalo Gas Hub project, with upstream and pipeline FEED studies advancing, robust pilot production at Mahalo East, and active negotiations on gas sales and funding arrangements.
- Upstream FEED led by Santos progressing smoothly with gas compression and water handling facilities
- Pipeline FEED underway with Jemena for a new 10-inch pipeline connecting to key Queensland gas markets
- Mahalo East pilot test shows increasing gas flows and high-quality reserves data nearing certification
- Ongoing environmental approvals for Mahalo North with additional groundwater monitoring
- Strong cash position of $15.9 million and secured debt facilities with PURE Asset Management
Mahalo Gas Hub Development Accelerates
Comet Ridge Limited (ASX: COI) has delivered a comprehensive update on its flagship Mahalo Gas Hub project in Queensland’s Bowen Basin, highlighting steady progress across multiple fronts as the company advances towards a Final Investment Decision (FID). The March 2025 quarterly report details ongoing Front End Engineering Design (FEED) activities for both upstream gas facilities and pipeline infrastructure, alongside encouraging pilot production results and active commercial discussions.
Leading the upstream FEED, Santos QNT Pty Ltd, the Development Operator of the Mahalo Joint Venture (JV), has made significant strides in engineering design for the gas compression facility, with the water handling facility contract award imminent. Concurrently, Jemena Queensland Gas Pipeline has commenced FEED on a new 10-inch, approximately 80-kilometre pipeline that will link the Mahalo Gas Hub to both the Queensland Gas Pipeline and the GLNG pipeline, facilitating access to domestic and LNG markets. This pipeline is proposed to be constructed on a build, own, and operate basis by Jemena, subject to FID.
Strong Pilot Production at Mahalo East
Comet Ridge’s wholly owned Mahalo East pilot project continues to deliver promising results. Since commencing dewatering in January 2025, the pilot has recorded steadily increasing gas flows over two months, supported by a managed decline in bottomhole flowing pressure. The gas composition confirms a high methane content with very low CO2, consistent with other Mahalo Gas Hub samples, underscoring the quality of the resource. The company is compiling a comprehensive technical data package for independent reserves certification, expected imminently.
Environmental Approvals and Regulatory Progress
Environmental approvals remain a key focus, particularly for the Mahalo North project, where Comet Ridge is navigating the Federal Environment Protection and Biodiversity Conservation Act (EPBC) referral process. Additional groundwater dependent ecosystem monitoring and sampling have been conducted to support the submission, with a review workshop scheduled in Canberra. The Queensland State Environmental Approval for the initial development area was secured in August 2024, paving the way for Petroleum Lease award.
Commercial and Financial Position
On the commercial front, Comet Ridge is actively engaging with multiple gas buyers, including industrial users and power generators, to secure additional gas sales agreements (GSAs) and prepayment arrangements that will underpin funding for its share of Mahalo JV development capital expenditure. The CleanCo GSA, executed in September 2023, is nearing finalisation with remaining conditions tied to finance and transport arrangements expected to align with the Mahalo JV’s FID timeline.
Financially, Comet Ridge ended the quarter with an unaudited cash balance of $15.9 million and anticipates receiving a $1 million grant payment from the Queensland Government before June 30, 2025. The company maintains secured debt facilities totaling $9.5 million with PURE Asset Management, with negotiations underway to extend loan maturity and associated warrant arrangements.
Outlook and Next Steps
With upstream and pipeline FEED processes advancing in parallel, Comet Ridge is positioning the Mahalo Gas Hub for a FID later in 2025. The combination of strong pilot data, regulatory progress, and active commercial discussions provides a solid foundation for the project’s transition from development to production. However, the timing of FID and final investment commitments remain contingent on completion of FEED, securing financing, and finalising gas transport agreements.
Bottom Line?
Comet Ridge’s Mahalo Gas Hub is gaining momentum, but the path to FID hinges on final engineering, approvals, and funding clarity.
Questions in the middle?
- When will the Mahalo Joint Venture reach its Final Investment Decision and commence construction?
- How will gas sales agreements and prepayment deals impact Comet Ridge’s funding and equity position?
- What are the potential risks or delays associated with the Federal EPBC approval for Mahalo North?
