Parkway Corporate operations on track for success – CSG master plan site decisions move ahead

The Australian cleantech company Parkway Corporate (ASX: PWN; FRA: 4IP), which specializes in industrial wastewater treatment, has presented another convincing quarterly result as at 30 September 2024. The company has once again succeeded in combining its growing operating business (Industrial Operations) with its diverse strategic initiatives and investments in the field of wastewater technology (Industrial Technology). In particular, the implementation of the so-called master plan for the CSG industry is increasingly taking shape. New is the plan for a centralized up-stream facility that could process up to half of the waste brine generated by the CSG industry in Queensland. In parallel with the planned central up-stream facility, Parkway has also identified a strategically located downstream project hub site for the planned down-stream facility within an established industrial area in Central Queensland.

Parkway generated group operating revenue of approximately A$4.04 million in the September quarter (FY25-Q1), compared to A$1.29 million in the corresponding period last year (FY24-Q1), an increase of 213%. In the reporting period, the company recorded cash inflows of A$4.91 million, which is on par with the prior quarterly record. Operationally, there are signs of a transition to profitability.

Parkway’s Industrial Operations division is growing: Parkway is increasingly involved in the turnkey design, manufacture and installation of complex water and wastewater related infrastructure. In many cases, Parkway is one of only a few suitably experienced service providers able to deliver specialized solutions for critical water-related infrastructure in key markets. Parkway continues to view the growth prospects for the Industrial Operations division as very encouraging. Parkway has a significant project backlog and an extensive pipeline of project opportunities, particularly in Victoria. The Victorian water authorities plan to invest A$15 billion in water-related infrastructure over the next five years. As a nominated supply partner, Parkway is well placed to take advantage of these opportunities.

Breakthrough: Electrochemical process turns waste brine into valuable industrial chemicals

Highlights of the quarter included a major breakthrough in proprietary brine technology. After a series of optimization studies, the company has succeeded in converting waste products from salt into industrially valuable caustic soda and hydrochloric acid in pilot tests using electrochemical processes. Parkway believes that these successful pilot results represent the first production of a mineral acid from an Australian waste brine.

Parkway reports significant progress on its strategic coal seam brine (CSG industry) projects in Queensland during the reporting period. The selection of project sites in relation to the Queensland CSG Industry Circular Economy Master Plan is progressing. The main objective of the QBS Master Plan is to utilize the process technologies developed by Parkway to convert CSG-derived waste brine and salts produced in Queensland into valuable industrial chemical products. Parkway’s MD, Bahay Ozcakmak, will provide further details on its go-to-market strategy and progress on the selection of future sites for upstream and downstream process facilities at the upcoming AGM on November 27.

The recently elected LNP Queensland Government supports the growth of the CSG industry, which is an important location factor. According to Australian Energy Producers estimates, the CSG industry in Queensland generated around A$22.4 billion in LNG export revenue and A$2.4 billion in local and state government revenue in the 2024 financial year, highlighting the size of the industry.

Centralized up-stream facility provides effective pathway to industry-wide solution for CSG waste brine

Parkway management believes that recent improvements have provided the company with an even more effective way to provide an industry-wide solution to the CSG industry’s waste brine and salt challenges. In the new process scheme, the initial brine concentration (Stage 1) at the upstream CSG customer site is concentrated by approximately 3 to 4 times to produce a Stage 2 brine that is much cleaner and more suitable for further processing. This Stage 2 brine is then transported to a QBS central upstream facility where the brine is further processed and concentrated a further 2-3 times, producing a highly concentrated brine stream (Stage 3) that is approximately 10% of the initial volume, demonstrating the extent of the volume reduction.

Previous upstream plans were predominantly based on extensive on-site processing before two separate concentrates would need to be transported to central hubs. Due to several recent process innovations and optimizations, the type of upstream facility proposed for upstream CSG customer sites has been significantly simplified, providing a number of operational benefits as well as improved financial performance.

The proposed upstream central processing facility is expected to have a nominal rated capacity sufficient to process up to half of the waste brine generated by the CSG industry in Queensland. Parkway has recently signed several MOUs, including with companies that have project sites suitable to accommodate the proposed central upstream facility, and is in the process of exploring options for a long-term lease that would support the development of the central upstream facility.

Site for planned downstream hub identified and secured

The proposed Downstream Hub is intended to convert all brine and/or salts from the QBS Central Upstream Plant(s) into a range of valuable industrial chemicals, including hydrochloric acid and caustic soda. Parkway has recently signed an MOU with an industrial scale project developer for the potential co-location of the proposed downstream hub on the developer’s existing project site. Parkway anticipates that the innovative process technologies developed by Parkway will in time become best available technology (BAT) for the treatment of CSG brine in Queensland.

Given the highly strategic importance of the proposed upstream hub and downstream hub to key industry participants, Parkway anticipates that it will be able to sell equity in its Queensland Brine Solutions (QBS) subsidiary and/or at a project specific SPV level to fund the development costs.