Two junior producers will start exploring for more gas in Queensland to feed the domestic east coast market after winning the latest tender for the Australian market only.
Queensland Natural Resources, Mines and Energy Dr Anthony Lynham today announced Central Petroleum and Armour Energy would develop a total of almost 400ha just north of the townships of Miles and Surat in southwest Queensland.
Speaking at the Australian Domestic Gas Outlook 2018 conference in Sydney, he said the government was meeting its recent election commitment to release land for domestic-only production by today releasing more than 6000sq km for exploration.
“These releases are shoring up Australia’s gas supply – further demonstrating Queensland as a reliable and affordable gas producer,” Dr Lynham said.
The release comes just five months after the first release of land for domestic supply only, with the first tender going to Senex Energy.
In the latest release, explorer Central Petroleum has been awarded exploration permits for 77sq km in the Surat Basin, 28km northwest of Miles.
Managing director Richard Cottee said securing the tenement will help fulfill a goal to preserve local jobs in Australia’s domestic manufacturing sector.
“We fully support the dedication of land specifically for the exploration and production of domestic gas, and the awarding of this tender helps us to further this cause,” Mr Cottee said.
“The Queensland Government is helping to secure Australian industry and the right way to do this is by increasing rather than rationing supply.
“I congratulate the government on its commitment, increasing local supply will go a long way in ensuring that we can maintain a diversified economy and the jobs that come with it.”
Armour Energy has been awarded permits to explore a 318sq km area 17km north of Surat, near the company’s existing tenures and existing infrastructure.
Armour Energy chief executive officer Roger Cressey said the area would add to the company’s existing portfolio in the Roma Shelf.
“Armour has recently restarted production from its south western Queensland Kincora Gas Project and we are confident that this new acreage will provide further resources for long term gas production,” Mr Cressey said.
“Additionally, the close proximity of this new tenement to our Kincora gas plant means gas resources can be easily connected, processed and delivered to market.
“While Armour Energy it is still in its early days in terms of gas production, we are contributing to the local region as well as the east coast gas market as a steady and growing supplier.”
The release of additional land for petroleum and gas exploration includes another 6000 sq km for domestic production as well and other 11,000sq km without any market condition.
“These tenements will give junior and mid-tier producers a further gateway into Queensland’s diverse exploration industry,” Dr Lynham said.
Dr Lynham told the conference it was not reasonable for other states to issue moratoriums on extracting their own gas when they are happy to import it from Queensland.
“These parcels of land will continue to help in meeting east coast gas supply, they are not a silver bullet,” he said.
“I see no reason why other mainland states cannot follow our lead to help secure a sustainable gas industry, including a stable domestic supply.”
Central Petroleum and Armour Energy must now negotiate land access agreements and fulfil all existing environmental and Native Title requirements before the Petroleum Lease is granted and work can begin.