Verbrec Secures $16m Worth of New Energy Security Contracts in Australia and PNG

Verbrec (ASX: VBC) has secured more than $16 million in new energy security contracts with seven clients across Australia and Papua New Guinea.

The company has executed a $6.8mn agreement to carry out the engineering, procurement and construction (EPC) of inline inspection facilities on a 150-kilometre gas pipeline in southern Queensland, and has also been awarded a total $7.2m in a number of pipeline, compression, and operations contracts nationwide.

These include a services agreement to act as owner’s engineer for the EPC phase of a pipeline realignment construction project in South Australia, contracts to undertake reactive maintenance works on pipelines in the Northern Territory and Queensland, and a two-year extension on operations and maintenance of four pipelines in Victoria comprising surveillance and patrolling, cathodic protection system monitoring and maintenance, coating surveys, management and supervision of third party works, engineering services and basic repairs.

The company has also started early stage design work on a $1.3m contract for compression and pipeline projects in WA’s mid-west region comprising detailed design, pipeline licence advice, environmental studies, and landholder access and liaison works.

Alliance Acquisition Paying Off

Verbrec subsidiary Alliance Automation has locked in an additional $1.6m in electrical, control system and cyber security work for operating asset awards with key energy companies in Queensland.

Alliance is one of Australia’s largest independent providers of digital transformation, cyber security for operational technology and industrial automation integration services.

Verbrec signed a deal in November to acquire Alliance from Telstra Group (ASX: TLS) for $5.5m upfront consideration, adding over $60m to its annualised revenue and resulting in a combined group of 700 team members across 18 locations in Australia and New Zealand.

Verbrec’s new projects—plus a $21m pipeline bi-directional upgrade contract for the Northern Territory’s Power & Water Corporation to unlock first commercial gas from the Beetaloo sub-basin and materially strengthen the security of local gas supply—represent more than $36m in energy security contracts won since the start of the financial year.

They cover more than 2,000km of gas pipelines across Australia and represent multi-year recurring revenue streams for the company.

Beetaloo Basin Investment

Verbrec said it was “uniquely positioned” to address a period of sustained reinvestment in Australia’s gas system, starting with the onshore Beetaloo sub-basin located 500 kilometres south-east of Darwin.

The development of Beetaloo’s gas fields has helped trigger data centre proposals from as many as a dozen proponents at sites near Darwin and in other remote regions and could attract up to $40 billion in private investment.

The Northern Territory government describes Beetaloo as a world-class resource with potential to generate over $17b in economic value over the next 20 years through royalties, employment and business growth.

The Australian Energy Market Operator has forecast gas shortfall risks under extreme peak day demand conditions in southern Australia from 2029, with additional supply needed in most scenarios from 2030, as production from legacy southern fields continues to decline.

WA Biomethane Study

Verbrec has completed a biomethane potential study for WA’s Department of Primary Industries and Regional Development.

The study assessed how much renewable gas the state could produce from its own waste, sewage and crop residues, what that resource is worth, and what would be required for the first biomethane projects to be built.

This follows company’s work for New Zealand’s Clarus energy group relating to the country’s first large-scale biogas upgrading facility at Broadlands.

A detailed feasibility study for a new Auckland biogas facility was also announced earlier this year.