The recipients of the first round of Plan for Accelerating Exploration (PACE) Gas grants have been announced today, with five exploration and development projects to share in $24 million in funding.
The grants will generate up to $174 million in new investment by oil and gas companies in local production projects.
The Senex-Santos Cooper Basin pipeline project received $5.82 million; $6 million went to the Beach Energy Otway Basin exploration project targeting conventional reservoirs; and $3.96 million for the Santos Cooper Basin re-fracture stimulation project.
The Santos Cooper Basin underbalanced drilling project received $6 million in funding, and $2 million went to the first phase of the Strike Energy Cooper Basin deep coal project.
Gas extracted through the grant scheme will be offered to South Australian electricity generators first, increasing the affordability of supply and putting downward pressure on power prices.
Minister for Mineral Resources Tom Koutsantonis said gas is key to lowering power prices in South Australia.
“Today, South Australians are presented with a clear choice between a state government driving more gas production and Steven Marshall, who wants to ban gas,” Mr 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.”
A projected decline in gas production could result in a shortfall of gas-powered electricity generation (GPG) impacting New South Wales, Victoria and South Australia from the summer of 2018-19, according to the Australian Energy Market Operator.
On Tuesday, the South Australian government announced it would run a second $24 million round of PACE Gas grants as part of its energy plan.
The government will also offer a new exploration licence for five blocks in the Otway Basin in the South East, through a competitive bidding process to be finalised by the end of the year.
The exploration area will not include the Coonawarra wine region.
The government’s royalty sharing program, also announced on Tuesday, will first apply to this new exploration area.
APPEA SA Director Matthew Doman said the government’s support for the development of gas resources came at a time when onshore exploration activity in Australia was at its lowest level in more than three decades.
Recent Australian Bureau of Statistics figures revealed a 64 per cent fall in exploration expenditure in the last year.
“The South Australian Government is to be congratulated for this initiative,” he said.
“Unlike other governments which have chosen to lock up their gas resources, South Australia continues to set the pace when it comes to supporting the safe and responsible development of natural gas.
“The local gas industry will now work with the Government and community to help secure reliable, affordable energy supply for South Australians.”
The news comes after the Australian gas industry agreed to work with government to ensure more gas is made available to the domestic market, after a crisis meeting with the Prime Minister earlier this week.