Australian renewable energy company Vast has executed a letter of intent with Hamburg-based fuels trader Mabanaft for potential offtake and equity investment in a green methanol demonstration plant called Solar Methanol 1 (SM1).
Vast is developing the SM1 project in Port Augusta, South Australia which will deliver up to 7,500 tonnes per annum of green methanol to shipping and aviation sectors. The plant will be partly powered by dispatchable electricity and heat from Vast’s co-located 30MW/288 MWh concentrated solar thermal power plant.
The deal with Mabanaft announced at the Maritime Industries Australia Decarbonisation summit in Perth, comes after the Solar Methanol Consortium, comprising Vast and project partners such as Calix and Fichtner, was provisionally selected to receive a conditional award of close to A$19.5m and €13.2m ($a total of around $24.5m) from a collaboration between the Australian and German Governments to develop SM1.
Vast said it expects to make a final investment decision on the project after completion of the front-end engineering and design (FEED) phase, which should see equity funding by the company to be matched by ARENA and PtJ for a total of up to A$78 ($52.2m).
“Partnering with Mabanaft is an important step forward for SM1 that will unlock significant development of the project. Together with the Solar Methanol Consortium, we are excited to partner with a company such as Mabanaft that offers its customers innovative energy solutions for their transportation, heating, industrial and agricultural needs,” said Craig Wood, CEO of Vast.
Mabanaft is also working on developing infrastructure in Hamburg for import and supply of clean ammonia, along with a larger infrastructure investment program to create a platform for low-carbon fuel alternatives. In November last year, the company announced its plan to build Germany’s first large-scale green-energy import terminal in Hamburg with project partner Air Products. Targeted to provide hydrogen to Germany in 2026, the planned import terminal is to be located at Mabanaft’s existing Blumensand terminal in the port.
