ASX-listed Helios Energy (ASX:HE8) is teaming up with a subsidiary of NASDAQ-listed Norwegian energy company Golar LNG to produce gas without the need to flare gas into the atmosphere.
Golar subsidiary Macaw Energies and Helios have inked a six month deal that sees Macaw provide a novel LNG production module on-site Helios’s Presidio Oil and Gas project in Texas.
Not only does Helios report the obvious ESG benefits of diverting waste gas from being flared directly into the air, the company also reported on Monday that it will produce oil production as a result.
This will be achieved through converting gas that would have been flared into natural gas liquids (NGLs).
The agreement between the two players – technically a gas sales agreement – means that Helios has locked in a solid buyer for its Presidio gas.
Golar will be paying Helios for the gas it receives on an offtake basis, which would be the same gas that would otherwise be flared. Macaw owns the rights to the LNG production module that allows this.
Macaw will sell liquids to third parties and profits will be split between the two companies.
Should the deal prove desirable to both sides, Helios has also signed a ‘framework’ to allow for future inclusion of more Macaw modules at Presidio.
The elimination of flaring is an increasingly popular ESG thematic within the energy sector.
While crypto mania seized the world in the COVID era, many companies – some still active on the ASX – started using flare gas to power bitcoin mining rigs.
That has become a less common thing to see on the ASX, for us here at The Market Online.
Perhaps converting the gas to sales just makes more sense.
That said, with energy in the red on Monday, Helios shares were down -3.77% to 5.1cps in afternoon trades.
The company is thinly traded and has a market cap of $132.8M.
HE8 last traded at 5.1cps.