Delorean’s Biomethane Contract Hinges on Key Approvals and Commissioning

Long-Term Biomethane Supply Agreement

Delorean Corporation Limited (ASX, DEL) has announced a significant milestone with the completion of a binding gas sales agreement with Origin Energy Retail Limited. The agreement secures the long-term supply of renewable biomethane from Delorean’s SA1 Salisbury bioenergy facility in South Australia. Under the contract, Origin Energy will purchase up to 200 terajoules per annum of biomethane on a take-or-pay basis for eight years, starting from the expected first gas delivery in April 2026, with an option to extend for an additional two years.

Strategic and Financial Implications

This deal is a cornerstone for Delorean’s SA1 project, locking in $30-40 million in revenue over the decade-long term, factoring in CPI escalations and the extension option. It also satisfies a key condition precedent for progressive payments totaling $6.1 million from the Australian Renewable Energy Agency (ARENA) under its National Industrial Transformation Program. The first milestone payment of $2.7 million is anticipated in October 2025, providing crucial funding support as the project moves towards commissioning.

Complementary Revenue Streams and Project Scope

Alongside this biomethane offtake, Delorean recently secured a long-term agreement with Supagas for the supply of biogenic food-grade liquid carbon dioxide from the same facility. Together, these contracts with investment-grade counterparties underpin approximately $55 million in locked-in revenues over 10 years. The SA1 Salisbury plant, currently under construction in Edinburgh Parks, is designed to process 70,000 tonnes of organic waste annually, producing multiple revenue streams including renewable natural gas, liquid CO2, carbon credits, renewable gas guarantees of origin, liquid fertilisers, and gate fees.

Operational and Regulatory Milestones Ahead

Key conditions for the gas sales agreement include the commencement of commissioning at the SA1 facility, obtaining all necessary operational and injection approvals, and the completion of gas network connection infrastructure by the Australian Gas Infrastructure Group. These steps are critical to enable the delivery of biomethane into the Short Term Trading Market and to Origin Energy’s receipt point. Delorean’s Managing Director Joe Oliver highlighted the importance of this agreement in confirming the bankability of the SA1 project and future bioenergy developments.

Positioning in Renewable Energy and Waste Management

Delorean Corporation operates as a vertically integrated bioenergy company, spanning engineering, infrastructure, and energy retail divisions. Its business model focuses on converting organic waste into renewable energy products, reducing landfill volumes, and generating multiple revenue streams. The SA1 Salisbury project exemplifies this approach, contributing to Australia’s renewable energy transition and supporting emissions reductions in hard-to-abate industrial sectors through renewable gas supply.