Australia targets 2025 for Beetaloo gas FIDs

Market: Natural gas
18/01/21

The Australian federal government wants upstream firms to be ready to make final investment decisions (FIDs) on their respective projects in the onshore Beetaloo basin in the Northern Territory (NT) following the unveiling of the Beetaloo strategic basin plan, which includes further state funding for infrastructure-related projects.

The plan sets out government assistance to upstream projects by financing infrastructure, including new roads, as well as ensuring there are no delays to development from regulations governing the sector, according to the plan released by the Australian Department of Industry, Science, Energy and Resources.

"Our plan aims to accelerate these development stages. Our objective is to bring forward the final investment decisions of Beetaloo development to 2025 or earlier," the plan said. None of the companies operating in the Beetaloo have provided any timeframe on gas development in the region as many are just in their initial drilling stage. Australian independent Origin Energy is expected to release results in the current January-March quarter from its drilling activity in the Beetaloo.

Beetaloo is one of five gas basins Canberra wants to accelerate development as part of its gas-led economic plan.

The new plan was accompanied by more than A$220mn ($169mn) in funding for the construction of new roads in the 28,000km² Beetaloo region, which is 500km southeast of Darwin in the NT and traverses the main road connecting Darwin to Adelaide in South Australia. Canberra has already provided exploration funding to upstream firms in the onshore region.

The government provided a timeframe for development of the Beetaloo with exploration well drilling to take place over the next two to three years. Around 20 to 40 appraisal wells are to be drilled in four years with around 200-300 wells to be drilled each year.

Development of the Beetaloo will also require new gas processing and transportation arrangements with additions to the Amadeus gas pipeline, which runs from Darwin to Alice Springs in the NT, the McArthur River gas pipeline linking the McArthur River base metals mine in the NT to Amadeus and the Northern Gas Pipeline linking Amadeus to the Carpentaria gas pipeline in Queensland and in turn to the east Australia gas market.

Total shale gas resources in the NT are estimated at 257,276PJ (6.87 trillion m³), with almost 70pc or 178,200PJ in the Beetaloo sub-basin, according to government agency Geoscience Australia. These onshore shale resources are potentially one of Australia's richest undiscovered gas resources, which could supply the east Australia market or be used as feedstock for the two LNG projects at Darwin.

But the expansion of Australian gas production for its expanded LNG exports has led to higher emissions from the upstream sector. It is unclear whether Australia will face international pressure to reduce greenhouse gas emissions and follow some of its largest trading partners and commit to a target date to transition its economy to a net-zero emissions economy.

By Kevin Morrison

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