Delorean Corporation (ASX:DEL) has popped as much as +20% early in Week 37 after inking a gas sale agreement with Origin Energy (ASX:ORG) that will see it make as much as $40 million from its SA1 bioenergy facility.
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The Delorean-Origin deal, scribed over the weekend, will see Origin buy up to 200 terajoules of biomethane from Delorean a year, to 2034.
Delorean expects to earn as much as $30M to $40M in revenue through the life of the deal, which brings the company’s next decade in earnings up to $55M when packaged with its recent long-term offtake agreement with Supagas.
“The long-term nature of this renewable gas offtake confirms the bankability now just of SA1 but of Delorean’s next build/own/operate bioenergy project and the multiple projects after that,” said managing director Joe Oliver.
The take-or-pay agreement will formally begin in April 2026, once Delorean’s under-construction SA1 Salisbury facility in South Australia is completed.
For Origin, the deal includes the purchase of Renewable Gas Guarantee of Origin certificates generated by the facility. These can be used by industrial customers seeking to reduce Scope 1 emissions in hard-to-abate sectors.
The $21 billion Australian energy blue-chip also carries an option to extend the deal for a further two years, should it want to activate that once 2034 rolls around.
Delorean also now gets access to $6.1M in grants from the Australian Renewable Energy Agency; this deal satisfied a last hurdle for the company.
The SA1 facility, wholly owned by Delorean, will process 70,000 tonnes of organic waste annually in its first stage, producing up to 210TJ of biomethane for injection into Adelaide’s wider local gas network.
HotCopper understands a planned Stage 2 expansion could also increase processing capacity to 125,000 tonnes a year under current approvals.
DEL is now selling at 15.5cps this morning; ORG shares dipped -1.2%.
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