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GGE Secures Helium Offtake Agreement


Published 09-JUL-2024 09:30 A.M.


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Our helium investment Grand Gulf Energy (ASX: GGE) has executed a Gas Sales and Processing Agreement (Offtake) with Green Natural Gas LLC for its Red Helium Project in Utah.

This will help GGE monetise any successful gas flow with a low CAPEX, which is an important reason why we remain Invested in GGE.

The Offtake is with the new owners of the Lisbon Helium Processing Plant located just 20 miles from GGE's project.

Key terms include:

  • An industry standard revenue split favouring GGE as the producer
  • Access to helium liquefaction capable of producing 99.9995% purity helium for premium pricing markets like semiconductors

This agreement validates GGE's near-term development plans, including potential drill programs across its Jesse-3 and Earp-1 targets.

The Lisbon Plant has a capacity of 60 mmcfd, a 45 mmcfd cryogenic plant, and the ability to liquefy 550 mcfd of high-purity helium.

It is well-positioned to supply GGE's potential production, with plans to recommission the liquefaction unit potentially by year-end to target premium helium markets.

The plant is also progressing on qualifying for carbon capture tax credits, providing an additional potential revenue stream.

Below is an image showing the location of GGE’s Jesse-3 well, with its close proximity to the Lisbon Helium Plant and local pipelines to transport the gas:

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How does this affect our Investment Memo?

Offtake and strategic agreement in place
GGE already has an offtake agreement for its helium and a strategic partnership to process and sell high purity helium with Paradox Resources, who owns the Lisbon Helium Plant less than 20 miles away from GGE’s ground.

Source: “Why did we invest in GGE?” Section - GGE Investment Memo 30 Nov 2022

The Lisbon Helium processing plant has new owners since we wrote our GGE investment memo in 2022. The new offtake agreement with the new owners has re-confirmed one of the main reasons we Invested in GGE - that is the ability to quickly monetise any commercial helium discoveries..

Surrounded by processing infrastructure
GGE’s helium project sits adjacent to an existing idle pipeline infrastructure that supports a quick pathway to production. The pipeline infrastructure runs directly from GGE’s ground to Paradox Resources’ Lisbon Helium Plant.

Source: “Why did we invest in GGE?” Section - GGE Investment Memo 30 Nov 2022

The closeness of the Lisbon Helium plant was a key reason we Invested in GGE - so its good that GGE has solidified its ties with the new owners of the plant.

What's Next for GGE?

  • Continued strategic discussions with Green Natural Gas LLC on further opportunities