Headed by Waratah’s Galilee Power subsidiary, the project aims to use waste coal from the proposed $A7.45 billion thermal coal mine, which is targeting exports of 40 million tonnes per annum.
The first phase of the project will generate 450MW at a cost of $1.25 billion while a second 450MW module is expected to be added as demand requires.
The private company views the Galilee Basin as ideal for supporting integrated gasification combined cycle power stations and this technology, which chemically produces a synthetic gas from pulverised coal to ultimately power a steam turbine generator, is the preferred option.
Galilee Power also aims to incorporate carbon capture and storage technology into the project, further meeting requirements under the Queensland government’s smart energy policy.
The feasibility study will assess potential sites to store the plant’s carbon dioxide emissions underground.
Construction of the power plant is estimated to create 1000 jobs while its operation will need more than 60 permanent workers.
Waratah chief executive Peter Lynch said the first stage of the power plant would have recurring operational expenditure of $265 million.
“The costs associated with the CO2 capture, transport and sequestration will be better known once prefeasibility studies are completed,” he said.
“A key part of our initial studies is to identify and quantify a suitable geosequestration site in the Galilee Basin, which has been described by authorities such as the CO2 Cooperative Research Centre and the CSIRO as having high potential for geosequestration.”
He added there was sufficient equity finance to fund the completion of feasibility studies while various options would be progressed to provide the funding required for the eventual construction.
The China First project, lying 30km northwest of the town of Alpha, is a joint venture with offtake partner China Metallurgical Group Corporation. It will create 6000 construction jobs and employ an operational workforce of 1500.
The joint venture aims to construct a 490km heavy haul railway line and a two-berth export terminal at Abbot Point.
Coal production is expected to start in late 2013.
Previously listed on both the Australian Securities Exchange and the Toronto Stock Exchange, Waratah was bought up by Queensland billionaire Clive Palmer’s private company Mineralogy earlier this year.
