QLD allocates land for gas supply

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 02 Feb 2017   Posted by admin

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Land released for CSG exploration could potentially stem the gas shortages on Australia’s east coast.     Image: Bruce Peebles.

By Cameron Drummond

A QLD government decision to allocate a small amount of the Surat Basin gas field for domestic-only use has received mixed responses from industry.

About 58sqkm of land for exploration with strict Australia-only sale conditions on gas produced will be released as a part of the trial.

QLD Natural Resources and Mines minister Dr Anthony Lynham said reliable supply for energy and feedstock is critical to business and industry, and the jobs and revenue they generate.

“Secure energy supplies is growing as a critical factor when businesses make decisions about when and where they invest, expand and create jobs,” Dr Lyndham said.

“The Palaszczuk government is job-focussed and we are prepared to try innovative measures like this pilot to generate support private sector investment and job creation.

“This is a pilot to see what can be achieved and how the market reacts.”

The QLD government will release the land in south-west QLD coal seam gas (CSG) rich Surat Basin to competitive tender this month.

It will use existing legislative powers to place a condition on the tenure preventing the operator exporting the gas.

The Surat Basin holds some of Australia’s richest proven CSG resources and already supports 4000 wells producing more than 790 petajoules of CSG for export as LNG from Gladstone.

The land release comes on top of 11,000sqkm recently awarded for gas exploration in the Cooper and Eromanga Basins, and 450sqkm in the Surat and Bowen basins.

Dr Lynham said the pilot would have no impact on existing gas producers or contracts in the state’s $70 billion LNG industry.

“The major LNG exporters have extensive gas reserves already in place under production tenure, which has underwritten their investment decision.”

The QLD Resources Council (QRC) lauded the move by the state government as an example to other states on how to respond to the gas shortages.

“It’s common knowledge the eastern seaboard of Australia is facing a gas shortage and instead of putting their head in the sand the [QLD] government is opening up land for exploration,” QRC chief executive Ian Macfarlane said.

“The proactive release of new tenure conditioned for domestic market is an innovative response by the QLD government to the lack of political back-bone shown by the governments of NSW and Victoria,” he said.

“The pilot should also be seen as chance to demonstrate best-practice regulations in action – fast, effective and focused on outcomes.”

While the Australian Petroleum Production and Exploration Association (APPEA) also welcomed the move, it said the market restrictions were unnecessary and risky.

“While the government is clear that this is only a trial, and it will only apply to 58sqkm, imposing restrictions is unnecessary and can only discourage development,” APPEA chief executive Dr Malcolm Roberts said.

“Now is not the time to create regulatory uncertainty. Eastern Australia is facing a supply shortfall in 2019.

“More acreage for exploration and lower regulatory costs will help bring new supply to the market – more restrictive regulations will not.”

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