A number of projects and programs have been launched across the east and south of Australia to increase the nations gas supplies. Sharon Masige reports.
There have been growing investments in gas developments over the past few months, aiming to increase gas supply across Australia’s east coast.
Queensland’s coal seam gas rich Surat basin has been the focus of major gas investments this year, with Shell Australia announcing the development of Project Ruby – involving the drilling of 161 new wells in the region.
The project, a joint venture with Shell’s QGC business, is set to secure 350 new and existing jobs during its 16-month construction over this year and into 2018.
Shell chairman Andrew Smith said the project reinforced the company’s commitment to continuing its gas supply in the east coast market.
“We are proud to be investing in regional Queensland, where state and local government have had the vision to establish the rules for a gas industry that creates jobs and supports farmers by providing water, building new roads and paying taxes,” he said.
Smith added that it will also reduce gas prices in the state.
Queensland Resources Council CEO Ian Macfarlane said Project Ruby was a vote of confidence in the state’s onshore gas industry.
Oil and gas exploration company Senex Energy also committed to a development in the Surat Basin, investing $50 million in the Western Surat gas project. Thirty wells will be drilled as part of the project, including gas and handling infrastructure.
The first wells are set to go online in the middle of this year, expected to produce around 10 terajoules of gas a day by mid 2018.
Senex aims to ramp up production once the wells are online. It also plans to drill and connect an additional 30-50 wells throughout 2018.
The Queensland Government continues its support for gas developments in the state, releasing land for gas exploration in the Surat Basin to address the gas shortage on the east coast.
The land, which covers around 58sqm of the Basin, was released under the condition that the gas produced is sold only in Australia, and the company that secures the land tender will be prevented from exporting the gas.
Queensland natural resources and mines minister Anthony Lynham said it was important for business and industry to have a reliable supply of energy.
“Secure energy supplies is growing as a critical factor when businesses make decisions about when and where they invest, expand and create jobs,” he said.
According to QRC, Queensland’s gas supply contributed $12.8 billion to the economy and supported 65,000 jobs between 2015 and 2016.
Australia’s east coast is not the only area receiving significant gas investment, with South Australian projects also aiming to boost gas supplies.
Origin Energy signed two agreements with French utilities company Engie to increase gas supply and sustain high energy demands in South Australia.
The first agreement will see Origin supplying gas to the Pelican Point power station and will gain access to 240MW of electricity production that will be supplied to South Australian customers. This will run for three years from July 2017.
The second agreement involves Origin selling eight petajoules of natural gas to Engie between 2018 and 2019
Origin CEO Frank Calabria said the agreements would help address South Australia’s energy security challenges, particularly after the state’s power outages.
“The power outages in South Australia reinforce the need for sufficient gas-fired power generation to be readily available, especially when wind and solar energy is not available,” he said.
“These agreements are examples of immediate steps industry is taking to safeguard electricity supply and make sure more natural gas will be available to meet the needs of customers.”
The South Australian Government is also playing its part in supporting the state’s gas supply, releasing the first round of grants for gas projects in the state earlier this year.
Under the Plan for Accelerating Exploration (PACE) Gas grant program, the state government awarded five exploration and development projects a share of $24 million.
These were given to the Senex-Santos Cooper Basin pipeline project; the Beach Energy Otway Basin exploration project; the Santos Cooper Basin re-fracture stimulation project; the Santos Cooper Basin underbalanced drilling project; and the first phase of the Strike Energy Cooper Basin deep coal project.
The grants are estimated to deliver $174 million in new investment by oil and gas companies involved in local production projects and. This will reportedly increase the affordability of supply and decrease power costs.
South Australian minister for mineral resources, Tom Koutsantonis, said, “We are taking charge of our energy future and in South Australia that means making the most of our abundant wind, solar and gas resources.
“This is enough gas in the ground in South Australia to power our grid for centuries and this package of measures will help us extract more of that gas, boost local electricity generation and put downward pressure on prices.”
The successful companies for the second round of grants will be announced in December this year.