The Queensland Government has announced the allocation of a small volume of potential gas supplies for Australian use only from a pilot exploration project in the state’s CSG-rich Surat Basin.
Natural Resources and Mines Minister Dr Anthony Lynham announced the release of land for exploration with strict Australia-only sale conditions on gas produced.
With gas shortages on the Australian eastern seaboard the focus of regulators and industry nationally, the government will release about 58 square kilometres of land for gas exploration, under the condition any gas produced must be used in Australia.
“Gas is a significant transitional energy source as we head to a renewable energy future,” Dr Lynham said.
“The Palaszczuk Government is job-focused 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 Department of Natural Resources and Mines will release the land in south-west Queensland to competitive tender by February.
The government will use existing legislative powers to place a condition on the tenurepreventing the gas operator exporting the gas.
The land release comes on top of 11,000sq km recently awarded for gas exploration in the Cooper and Eromanga Basins, and 450sq km 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.
APPEA has welcomed the announcement, but CEO Dr Malcolm Roberts said he does not support the trial of restrictions on gas marketing.
“APPEA is disappointed that the government has, for the first time, attached ‘Australian market conditions’ to the release of new acreage,” Dr Roberts said.
“While the government is clear that this is only a trial, and it will only apply to 58sq km, imposing restrictions is unnecessary and can only discourage development.
“Australian market conditions are unnecessary. Queensland’s LNG projects are the leading suppliers to the local market.
“Supply to domestic customers from the projects is upwards of two-thirds of Queensland’s demand. Customers do not need regulation to obtain gas.”
Dr Roberts said now is not the time to create “regulatory uncertainty”.
“Eastern Australia is facing a supply shortfall in 2019. Exploration has crashed to its lowest level since 1981. We need to see State governments striving to expand gas supply by releasing more acreage and cutting regulatory costs,” he said.
“To its credit, the Queensland Government is developing an action plan to boost local supply. The industry supports this initiative – and urges other states to follow suite.
“More acreage for exploration and lower regulatory costs will help bring new supply to the market. More restrictive regulations will not.”