North Queensland Bio-Energy Corporation Limited (NQBE) is on target to commence construction of its $640 million sugar-based renewable energy facility early next year after signing an agreement with the company’s preferred Engineering, Procurement and Construction (EPC) contractor in Bangkok last week.
Speaking after arriving back in Ingham NQBE chairman, Robert Carey, said the agreement placed an upper ceiling on the project’s EPC price - one which was within NQBE’s budget.
“The EPC contractor now has 10 weeks to further negotiate with suppliers and sub-contractors to drive the EPC price down further,” Mr Carey said
“Under the terms of the agreement, following the 10-week negotiation with suppliers and sub-contractors, a fixed price EPC contract will be signed on or before 31 March 2018, paving the way, subject to finalisation of the financing arrangements, for the project to commence construction after the 2018 wet season.”
“Whilst the project has had its fair share of hurdles and disappointments, the directors and its committed management team have persisted in finding a pathway around the hurdles and the signing of the Deed of Agreement with Jiangsu Jintongling Fluid Machinery Technology Co., Ltd (JTL) in Bangkok late last week represents not only a reward for their hard work, but also a significant turning point for the project.
After a number of false starts and disappointments with other EPC contractors, JTL were chosen because of their manufacturing capability and their vast experience as EPC contractors in the power generation industry in China. JTL is a publicly listed (not State owned) company on the Chinese Stock Exchange and the company’s chairman, Mr Ji, has been personally involved in the negotiations.
“The signing of this agreement sends a very positive message to NQBE’s shareholders, and others, that this project is about to grow wings.”
He thanked NQBE shareholders for their support and patience and said he believed that the company was now in a position to repay that support by delivering a “state of the art” Facility that will deliver not only additional economic benefits but also ultimate control of the asset.
“The NQBE model is absolutely unique for primary production activities, however it is a model that can be certainly duplicated in other sugar growing areas of Australia, once growers in those districts understand what is being achieved in Ingham and see the benefits,” Mr Carey said.
“There is still a lot of work to do, but the agreement reached in Bangkok is a major milestone for the project and allows the NQBE Board to push forward with renewed vigour.”
Mr Carey said the significance of the NQBE project to the Herbert River district and the broader sugar cane farming communities cannot and should not be underestimated.
“This project represents a game changing model for the industry in so far as it uses 100% of the energy available in sugar cane and when the project ultimately includes second generation cellulosic technology, the capacity to increase the production of renewable products become endless.
“The NQBE project is about delivering better revenue outcomes for cane farmers, however, it is also very much about increasing jobs and economic activity in the Herbert River district. Ingham is slowly dying and without a change in attitude and direction, the town will continue in that direction.”
The NQBE Facility will be capable of crushing 3.1 million tonnes of sugar cane annually and export in excess of 550,000 megawatts of renewable power into the National electricity grid, enough to power approximately 28,000 homes.
It will provide approximately 450 jobs during construction and create more than 250 permanent positions in the district when fully operational in 2021.
Mr Carey urged detractors of the project to obtain the facts about the project and its benefits and objectively rethink what it will mean to their business, their families and the district’s future.
“The NQBE Board has spent a lot of time and energy to get this project right and the vision is for a sustainable and viable industry, one that can grow and take advantage of the new technologies that are about to become commercial reality.
“Growers who are not yet involved in the project now have a choice to be part of a game changing journey, or simply sit on the sidelines and watch the industry pass them by.”
Further information:
Robert M Carey
NQBE Chairman
Mobile: 0418 778 403
