Could Supply Challenges Threaten Lakes’ Ambitious Nangwarry CO2 Project?
Lakes Blue Energy has entered a binding agreement with Beijing Maison Group to fully fund a feasibility study for a new CO2 plant in South Australia, aiming to tap into a certified 26 Bcf high-purity CO2 resource. This move complements Lakes’ ongoing gas project in Victoria, signalling diversified growth prospects.
- Binding Heads of Agreement signed with Beijing Maison Group
- Maison to fully fund feasibility study for 150-200 tonnes/day CO2 plant
- Nangwarry holds certified 26 billion cubic feet of high-purity CO2
- Expression of Interest campaign to engage potential CO2 offtake partners
- Wombat Gas Project drilling on track for July 2025 start
Strategic Partnership to Advance CO2 Commercialisation
Lakes Blue Energy has taken a significant step forward in developing its Nangwarry CO2 project in South Australia by signing a binding Heads of Agreement with Beijing Maison Group. Under this agreement, Maison will fully fund and lead a bankable feasibility study to evaluate the construction of a food and beverage-grade CO2 liquefaction plant. This plant is expected to produce between 150 and 200 tonnes of high-purity CO2 per day, with applications extending beyond food and beverage to medical and industrial sectors.
A Certified Resource with Long-Term Potential
The Nangwarry site boasts a certified resource of 26 billion cubic feet of CO2, enough to sustain production for approximately 20 years. This certification underpins the project's potential to become a stable and significant domestic source of CO2, a market currently challenged by supply shortages and rising costs due to recent plant closures and logistical disruptions.
Market Engagement and Timing
To capitalise on this opportunity, Lakes plans to launch an Expression of Interest campaign shortly, aiming to attract potential offtake partners. Market prices for CO2 vary widely, from $200 to $2,000 per tonne depending on quality and volume, highlighting the commercial importance of securing reliable supply agreements. If the feasibility study yields positive results, Maison intends to propose the design, construction, and financing of the CO2 plant, targeting operational status by mid-2027.
Balancing Growth with Core Operations
While advancing the Nangwarry CO2 project, Lakes remains focused on its flagship Wombat Gas Project in Victoria’s Gippsland Basin. Preparations continue for drilling at the Wombat-5 well, scheduled to commence on 31 July 2025, aiming to deliver near-term gas supply to the Victorian market. The partnership with Maison allows Lakes to explore additional revenue streams from Nangwarry without diverting resources from its primary gas operations.
Outlook and Industry Impact
Lakes Blue Energy’s Chairperson, Roland Sleeman, emphasised the complementary nature of these projects, describing Wombat as a potentially transformational development and the Nangwarry agreement as a low-risk pathway to unlock value from a growing CO2 market. The introduction of a new, competitively priced CO2 source could help stabilise domestic supply and address recent market shortages, benefiting a range of industries reliant on this critical gas.
Bottom Line?
As Lakes Blue Energy advances both gas and CO2 projects, the coming feasibility results and drilling outcomes will be pivotal in shaping its growth trajectory.
Questions in the middle?
- What will the feasibility study reveal about the economic viability of the Nangwarry CO2 plant?
- Which companies will respond to the Expression of Interest for CO2 offtake partnerships?
- How will the success of the Wombat-5 drilling impact Lakes’ overall project funding and timelines?
