Domestic gas supply opportunities in Queensland are being explored as a result of Galilee Energy and Alinta Energy signing an agreement involving the Glenaras gas project.
Managing director Peter Lansom said Galilee is delighted to have entered into a heads of agreement (HoA) with a customer such as Alinta Energy which has a strong Queensland presence.
“Galilee is committed to working with potential customers to supply natural gas that will help to support the gas-led recovery and assist in the creation of sustainable employment for Queenslanders,” Lansom said.
The agreement follows both the Queensland and Federal Governments’ policies to support new supply of natural gas int the domestic gas market.
“I am proud that Galilee has the opportunity to help support the supply of natural gas for homes, local manufacturing and to boost regional investment,” Lansom said.
He added that the HoA with Alinta Energy is a crucial step towards Galilee becoming a material supplier of gas to the east coast market and provides the company with another commercialisation option.
Last week Galilee reported that the Glenaras multi-well pilot had been producing strongly, with the average gas rate maintaining 50 million standard cubic feet per day (Mscfd).
The company outlined that the gas measurement from the recently installed separator is still constrained, with the project to remove it being impacted by recent wet weather. However, the equipment is onsite and will be installed as a priority.
The workover rig has also been contracted and is scheduled to mobilise in the last week of March. All other key enablers for the pilot enhancement program are well placed.
Galilee further highlighted the larger capacity downhole pumps have arrived in Brisbane from overseas, and the mobile camp is currently in Longreach to be transported to site once the council roads have re-opened.
The manufacturing of all necessary surface equipment is complete and due onsite from 29 March, with installation activities planned to commence afterwards.
In addition, the company announced in February it would accelerate the process of achieving commercial gas production of its Glenaras multi-well pilot with a pump optimisation program.
With the 11 wells at the pilot now on continuous production, the aggregate water rate for the project has reached 14,250 barrels of water per day (BWPD).
The lateral wells have continued to decline and are now at 4400 BWPD, from from a monthly rate of 6000 BWPD.
The production from the wells has reached the capacity of the existing downhole pumps and the reservoir quality has been higher than expected, resulting in the potential well performance exceeding existing pump design specifications.
As a result, Galilee has decided to accelerate the process of achieving commercial gas production by implementing workers in six of the wells to optimise the production performance.
The pilot enhancement program is targeting an increase of more than 30 per cent in total pilot water production, which is expected to have a material impact on the pilot.