Queensland ramps up focus on domestic gas supply

In a national first, a joint venture (JV) between Australia Pacific LNG and Armour Energy in Queensland will seek out gas only for use by Australian manufacturers.

The announcement, made by Queensland mines minister Anthony Lynham, revealed the JV’s successful bid for 18 square kilometres of land 22 kilometres south-west of Chinchilla.

Under the permit’s conditions, gas can only be sold to Australian manufacturing businesses, with first gas expected in mid-2020.

“This is about more petajoules of Queensland gas in pipes, fuelling jobs in manufacturing,” Lynham said.

“While other states close their doors, Queensland continues to rise to the challenges to keep our manufacturers in business.”

The 18-square-kilometre block is highly prospective given exploration levels in the area are high and it is surrounded by production leases.

Australia Pacific LNG chief executive officer and Armour Energy chief executive officer Roger Cressey both welcomed the announcement.

“The proximity of the block to our existing infrastructure will allow us to bring the gas to the east coast market efficiently and on competitive terms,” King said.

Cressey reciprocated his optimism, saying the announcement provided “a great opportunity for Armour.”

“As an Australian company headquartered in Brisbane, Armour is pleased that the award of this block to the JV will contribute to the provision of more affordable energy and feedstock to Australian manufacturing businesses,” he said.

Armour is already producing up to 3.6 petajoules of gas per annum and exploring for gas across its 2090 square kilometre exploration acreage on the gas-rich Roma Shelf near its Kincora project.

It was one of just four companies awarded exploration tenders to look for domestic-only gas in September last year.

The other companies included Chi Oil and Gas on 5266 square kilometres near Quilpie, Santos/Shell JV on 393 square kilometres near Surat and Central Petroleum on 77 square kilometres near Miles.

The announcement follows a recent shift by the Queensland government to encourage domestic gas supply, after last week’s news that Senex Energy would seek gas for Australian-supply only on 153 square kilometres of land near Miles.

Since 2015, the state’s government has released more than 39,000 square kilometres of land for gas exploration, with over 20 per cent of it guaranteeing the gas will be for Australia buyers.

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