Carbon Energy has signed a Power Station Development Agreement with Arcadia Energy Trading to develop a 25MW and a 300MW power station fuelled by syngas in Queensland, Australia.
Arcadia will sign a long-term power purchase agreement (PPA) to purchase electricity from Carbon Energy's 25MW power station at Bloodwood Creek starting in November.
Carbon Energy will develop the power station with a capital cost of $30m-$35m and Arcadia is expected to acquire the station once Carbon Energy has obtained a mining lease for it.
Under a long-term gas supply agreement, Carbon Energy will then supply syngas to Arcadia for the station.
Arcadia will also acquire the 300MW power station at Carbon Energy's Blue Gum Energy Park near Kogan in Queensland and enter into a long-term gas supply agreement.
The power station will require initial field development by Carbon Energy of about $100m backed by a gas supply agreement.
Arcadia general manager James Gillard said with the agreement, Arcadia plans to move from a pure electricity trading position into a physical power business in the Australian market.