Basin review, Carnarvon Basin, Cooper Basin, Projects, Surat Basin

Driving Industry: An overview of the key performers in Australia’s gas basins

Here are some of the key performing basins and the top operators in each of them.

Carnarvon Basin

Woodside, through its North West Shelf (NWS) LNG Project, produced nearly 90,000 million cubic feet (MMcf) in sales gas and approximately 361,380 MMcf of LNG in the first half of 2014, confirming the basin’s reputation as a solid investment.

An important well in the basin’s development over the past few months, however, has been Apache Energy’s Phoenix South-1 prospect, which was completed in late August 2014 after reaching a total depth of 4,595 m.

Meanwhile, the Julimar and Brunello fields located in the basin, of which Apache sold its equity ownership in to Woodside in late 2014, are also expected to unlock in excess of 2.1 Tcf of sales gas.

Another big development over the past few months has been the signing of a letter of intent (LOI) between Hess Exploration Australia and the NWS venture to process gas supplied from its fields in the basin via its Karratha Gas Plant.

According to Woodside Senior Vice President NWS Niall Myles, the LOI “provides an attractive option for third-party gas owners to commercialise their resources in proximity to existing LNG infrastructure”?.

Cooper Basin

The Cooper Basin is an historic location for the Australian gas industry, producing Australia’s first shale gas at commercial flow rates in 2012, while being Australia’s largest onshore gas-producing basin.

The Santos-operated Moomba-191 well, situated 8 km from the Moomba Gas Plant, had an initial flow rate of around 3 MMcf/d. It was instantly hailed as a game-changer for the industry and provided a serious boost to Australia’s shale movement at the time.

Since then, the basin has been billed as one of Australia’s most prolific onshore basins, containing approximately 190 gas fields and featuring approximately 820 producing gas wells which feed into production facilities at Moomba in South Australia and Ballera in Queensland through approximately 5,600 km of pipelines and flowlines.

Santos’s performance in the basin has been boosted recently with the SACB JV, which also includes Beach Energy and Origin Energy. Apart from that, Santos has largely focused on a drilling campaign in the Big Lake field, targeting the Toolachee, Epsilon and Patchawarra formations and Tirrawarra Sandstone.

A Santos spokesperson told Gas Today that “despite the current volatility in the oil price, Santos remains committed to the development of the Cooper Basin, with a view to unlocking its full potential”?.

Additionally, exploration work by a number of other Australian entities – together with global oil and gas companies including BG and Chevron – is set to continue in the basin, ensuring the basin will remain extremely relevant for the industry.

Surat Basin

Origin Energy’s development of the Australia Pacific LNG (APLNG) Project’s gas fields in the basin, located in south-west and central Queensland, has featured heavily as the main driver behind exploration and production in the Surat.

A total of 1,019 development wells have been drilled to date as part of Origin’s CSG-to-LNG project, with 666 wells commissioned to 31 December 2014.

Another 34 operated production wells were drilled during the December 2014 quarter.

The basin is connected to markets via APA Group’s 937 km South West Queensland Pipeline – with APA looking to integrating bi-directional flows on the pipeline – and Origin’s 530 km APLNG gas export pipeline.

Meanwhile, Arrow Energy is also undertaking an extensive exploration, development and production project in the basin with its Surat Gas Project, which is expected to include approximately 6,500 CSG wells and around 6,000 km of gathering lines across the basin.

Bowen Basin

The Bowen Basin, alongside the Surat Basin, is in the unique position of having the largest known proven reserves of CSG resources onshore Australia, while over 100 conventional hydrocarbon accumulations have been discovered in the basin.

Origin Energy’s Spring Gully Project is a solid performer in the region with recent figures from the company placing its gross average production at 117 TJ/d.

Meanwhile, fellow industry stalwart Blue Energy recently reported a significant increase in contingent resources for the company’s wholly-owned ATP-814-P CSG asset in the basin, following an independent review by US-based reserve certifier, Netherland Sewell and Associates.

The upgrade sees 3C resources in the basin increasing by 21 per cent to a total of 3,462 PJ, with 1C and 2C contingent resources for the permit also increasing by 30 per cent and 27 per cent respectively.

The six separate blocks comprising ATP-814-P are surrounded by Arrow Energy’s existing Moranbah Gas Project, with its proposed new gas development and export pipeline project presently undergoing a front-end engineering design (FEED) process to supply the Gladstone LNG hub.

Another important development in the basin is Arrow Energy’s development of its CSG reserves in the area.

While Royal Dutch Shell CEO Ben van Beurden has ruled out the proposed Arrow LNG greenfield liquefaction facility on Curtis Island with PetroChina, an Arrow Energy spokesperson told Gas Today that “collaboration discussions with third parties are continuing, to identify the best option for monetising Arrow’s gas reserves in both the Surat and Bowen basins”?.

Georgina Basin

While the basin is actively being explored for shale gas potential, Statoil exited its EP 127 and EP 128 permits in the basin last year on the back of “disappointing results”?.

Meanwhile, the Northern Territory Government’s enthusiasm for a pipeline linking the NT to the east coast gas market has provided further impetus for companies looking to develop resources in the area.

Central Petroleum is one such company encouraged by the prospect of a new market, with a recent development being the Gaudi-1 unconventional shale gas well in the basin, which was drilled to a total depth of 2,420 m after coring through the Arthur Creek Formation and Thorntonia Limestone late last year.

Central Petroleum Managing Director Richard Cottee said at the time that Central was “encouraged by the preliminary results of Gaudi-1, where a thicker than anticipated sequence of Lower Arthur Creek Formation has been intersected and is desorbing gas”?.

Gaudi-1 is the second well in a program of unconventional gas exploration wells operated by Central, via subsidiary Merlin Energy and in partnership with Total.

Canning Basin

The US Energy Information Agency reported in 2013 that the Canning Basin has the largest shale gas potential in Australia, and the eighth largest in the world; with estimated recoverable shale gas in excess of 225 Tcf based on the Goldwyer Formation play alone.

However, the basin’s remote location, low population density and little-to-no industrial activity mean that any further developments would require significant investment in associated infrastructure.

Developments to keep an eye on

In addition to the key performing basins outlined above, the following basins are also full of potential:

  • The Beetaloo Sub-Basin saw Falcon Oil & Gas Australia announce a joint venture over its permits in the basin with Origin Energy and Sasol Petroleum Australia, with plans to unlock the hydrocarbon potential of the sub-basin through a four year exploration program, beginning in 2015;
  • The McArthur Basin, in which Santos QNT drilled the Tanumbirini-1 exploration well in EP161 to a depth of 3,945 m. The primary target, the Middle Velkerri, yielded multiple thick intervals of organic-rich rocks accompanied by significant mud gas shows, while elevated gas readings were encountered over a total gross interval in excess of 500 m. The well has been suspended for potential re-entry in 2015; and,
  • The onshore Perth Basin’s proximity to the gas market in Perth, along with a tightening gas supply, means any new sources of gas supply in the area will make for a commercially attractive opportunity.
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