Two projects in the Mid West will potentially hinge on the outcome of a WA government tender for a new desalination plant, following a market-led proposal by AGIG.
The state government expects to launch a tender for a desalination plant in the Mid West after a market-led proposal from AGIG to build in Oakajee did not meet the standard for exclusive negotiation.
Australian Gas Infrastructure Group’s bid was to supply water to the Water Corporation for Geraldton from a new reverse osmosis desalination plant.
Details regarding market-led proposals are notoriously scarce, and AGIG said it had no comment.
But the business, with assets including the Dampier to Bunbury gas pipeline, offered an insight into a planned desalination plant it dubbed ‘H2Oakajee’ at a Mid West Chamber of Commerce and Industry event last year.
AGIG said it was seeking a water offtake deal of at least 30 years, with the plant to produce about 5 billion litres of water per annum.
That would supply large-scale irrigated agriculture, industrial and mining customers.
The briefing said it would not require state government capital, would take pressure off local borefields, and would mostly be powered by renewables and battery storage.
The new water source could also support development of a local green hydrogen industry.
Green hydrogen requires water to be split by renewable powered electrolysis into hydrogen and oxygen.
A green hydrogen development could be used to blend hydrogen into the state’s gas network, the briefing said.
That would help reduce carbon intensity.
The government said the submission had a reasonable chance of meeting the market-led proposal criteria, but did not hit the threshold for an exclusive negotiation.
That means it will be put out to tender, with a spokesperson for the Department of Jobs Tourism Science and Innovation telling Business News it was anticipated an expression of interest process would be released in the coming months.
“Planning is under way by the Department of Jobs, Tourism, Science and Innovation to run an open and transparent tender process for the Mid West Desalination Project,” the spokesperson said.
AGIG will be given a 15 per cent bid premium through the first mover advantage rules in the state’s market-led proposal policy.
For context, Perth has two desalination plants, with a third planned at Alkimos, which would produce about 100 billion litres of water per year.
AGIG has been working in the Mid West on hydrogen and magnetite projects.
One is with gas distributor Atco, to build a 10-megawatt green hydrogen project they called the Clean Energy Innovation Park.
The partners received a $28.7 million grant from the Australian Renewable Energy Agency, with a final investment decision flagged for later this year.
That hydrogen would be blended into the natural gas network.
The state also gave the utility a $216,000 grant for feasibility work on hydrogen blending in 2020.
The government has a target for about 10 per cent of the gas in the network to be hydrogen, replacing natural gas.
Oakajee was previously picked by the state government as a potential green hydrogen development site, with an expression of interest process attracting attention from as many as 60 suppliers.
AGIG signed on with Cashmere Iron in 2021 for pre-feasibility work on the Cashmere Downs magnetite project, which could produce up to 30 million tonnes of iron ore annually.
The utility’s role was to study options for gas, slurry, and water infrastructure.
Anglo American was to be the foundation offtake partner, pending the feasibility.
