The proposed new 152 km pipeline to be developed by APA is shorter than the one contemplated in the definitive feasibility study (DFS) for the Gabanintha project, and is expected to deliver material operating cost savings from lower gas transportation charges.

The two companies have agreed to an exclusivity period on negotiation of the gas transportation services for the term of the MoU, and would negotiate and endeavour to agree on transaction documents.

“We are very pleased to have entered into this agreement with APA on the development of a proposed new gas pipeline, providing low risk delivery of gas to the project, cost reduction compared to the DFS as well as the opportunity to source gas from the significantly closer emerging Perth basin gasfields,” said TMT MD Ian Prentice.

“We will be working together to develop a reliable energy solution for the Gabanintha vanadium project. This represents another key milestone as we progress the development of this lowest-cost quartile, large scale, long life, world class vanadium project.”

The DFS into Gabanintha found that the project could produce 27.9-million pounds a year of vanadium pentoxide over a mine life of 16 years. The study estimated that the project would cost $318-million to develop, and would deliver mine-life earnings before interest, taxes, depreciation and amortisation of A$4.1-billion and an estimated free cash flow of A$1.09-billion.