“Best Available Technology”
The Australian specialist for industrial wastewater treatment, Parkway Corporate (ASX: PWN; FRA: 4IP), is proving that a change in thinking is possible even in a conservative industry like the wastewater sector. The company aims to replace the industry-standard disposal of problematic CSG residual brine (CSG = Coal Seam Gas) in Queensland in retention basins with a truly circular economy alternative.
The solution proposed by Parkway’s subsidiary Queensland Brine Solutions, “QBS”, consists of an intelligent combination of innovative process technologies in both the upstream (QBS Brine Management Complex) and downstream (QBS Brine Electrolysis Complex) areas. Parkway will initially use the residual brine to produce high-purity brine and salts suitable for further processing, including through electrochemical processes, into high-value green chemicals.
Quarterly Report Shows Progress on Multiple Fronts
The current quarterly report for the December quarter 2024 reports on recent progress: In the past quarter, Parkway achieved a technological breakthrough in the production of pure, “green chemicals” through electrolysis (QBS Electrolysis Complex). At the same time, the company has already signed a term sheet for the location of the future QBS Brine Electrolysis Complex. Parkway also reports positive feedback from the CSG industry itself and has held intensive discussions with various government agencies in Queensland. Parkway is already discussing various financing options for the various projects with major investors and offtakers. A series of strategic planning workshops with several key stakeholders is planned for February 2025.
The quarterly report states: “Internal assessments confirm that QBS is likely to be able to offer the CSG industry an extremely attractive and sustainable liquid waste disposal service for which there are currently no other alternatives and which is unlikely to be available in the foreseeable future.” The aforementioned internal assessments take into account extensive scenario analyses as well as technical and economic evaluations and feedback from the industry itself. The aim of the multi-stage major project “Queensland Brine Solutions” (QBS) is to create a permanent, integrated industry-wide solution for the disposal of brine wastewater from Queensland’s billion-dollar CSG industry.
Planning activities for the upstream QBS Brine Management Complex are progressing positively. The quarterly report contains important information about the extent of the planned development. The planned QBS Brine Management Complex is expected to have sufficient nominal capacity to treat at least half of the waste brine that will be generated by the CSG industry in Queensland in the future, including the enormous amounts of waste brine produced over the past decade! While there are opportunities to further increase the capacity of the proposed QBS Brine Management Complex, transport distances for the remaining brines will likely require a separate central facility located upstream and closer to the remaining, less urgent waste brines.
Agreement Signed
Parkway also notes that the company recently signed an agreement with a project developer regarding the potential location of the planned QBS Brine Electrolysis Complex on the developer’s existing project site. The initial phase of the planned QBS Brine Electrolysis Complex is expected to have a nominal capacity sufficient to process more than 50% of the waste brine and salts generated by the CSG industry in Queensland.
As QBS involves building critical infrastructure on a substantial scale, Parkway is already working to attract additional strategic partners, including strategic investors. As possible financing options, Parkway explicitly mentions the sale of equity at the QBS subsidiary level and/or at the project-specific entity level. In any case, Parkway intends to lead the development of the proposed projects and ensure appropriate value creation. Other financing possibilities have also been identified, including advance payments for liquid waste disposal services and/or industrial chemical sales to be provided by QBS, as well as a range of other options including capital markets and government support.
Parkway is also in discussions with other key stakeholders, including potential OEM and EPCM partners who can assist with project development and execution, as well as several large, including global companies interested in potential participation in the QBS brine management complex or the QBS brine electrolysis complex.
Operationally, Parkway continued its progress in increasing cash flow and profitability over the past quarter. Additionally, the company is working on a project pipeline to further support long-term, sustainable growth. Based on operating revenues of AUD 3.48 million and an increased focus on profitability, as well as a contribution from the R rebate, Parkway generated an EBITDA of AUD 0.23 million in the December quarter, representing an improvement over the previous year (USD 0.1 million in FY24-Q2). Customer payments in the quarter totaled AUD 4.08 million, an improvement over the previous year (AUD 0.82 million in FY24-Q2). Parkway recorded a net cash flow of AUD 0.10 million for the quarter, attributed to AUD 0.59 million from operating activities, AUD 0.56 million from investing activities (including capitalized R), and AUD 0.15 million from financing activities.
Conclusion: The best way to solve big tasks is by breaking them down into several digestible pieces. Following this principle, Parkway Corporate has divided the problem of CSG residual brine in Queensland into individual steps, so that the overall solution consists of the intelligent linking of various upstream and downstream processes. Parkway can claim to be the first company to take a holistic approach to the problem. Gradually, all parties involved are beginning to realize that the approach proposed by Parkway could indeed set a future standard in terms of ‘best available technology’, especially since everyone would benefit. Of course, such complex projects require a lot of preparation, but the planning and discussions with all stakeholders and partners are progressing positively. If Parkway succeeds in taking a leading role in realizing a brine recycling economy in Queensland, this would be of great significance for the company. Brine management in Queensland would provide substantial, recurring cash flows over very long periods. Moreover, Queensland could send an industry-wide signal for the shale gas industry. This potential does not yet seem to be reflected in Parkway’s current share price.
