The Queensland Government has released land for gas exploration in the Surat Basin, under strict conditions that the gas produced is sold in Australia.
This is set to aid the current gas shortage in the eastern seaboard.
The pilot exploration project covers approximately 58sq kms of the coal seam gas (CSG) rich area. The Basin already has 4000 wells that produce more than 790PJ of CSG for export as liquefied natural gas (LNG) from Gladstone.
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.
“This is a pilot to see what can be achieved and how the market reacts.”
The state government will use existing legislative powers to prevent the company that secures the land tenure from exporting the gas.
Lynham added that the project will not affect existing gas producers or contracts.
“The major LNG exporters have extensive gas reserves already in place under production tenure, which has underwritten their investment decision,” he said.
The Queensland Resources Council (QRC) welcomed the land release.
“The gas produced will only be sold domestically; that will help secure a reliable and affordable supply of gas to business and industry,” QRC chief executive Ian Macfarlane said.
“The pilot should also be seen as chance to demonstrate best-practice regulations in action – fast, effective and focused on outcomes.”
The land will be released for competitive tender by February.