PERTH (miningweekly.com) – The Australian Petroleum Production and Exploration Association (Appea) has welcomed the South Australian government’s commitment to invest A$24-million to help fund five gas exploration and development projects as part of its Plan for Accelerating Exploration (Pace).

South Australia Resource Minister Tom Koutsantonis on Friday said the grants would generate up to A$174-million in new investment by oil and gas companies in local production projects.

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.

The state 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 five Pace gas grant projects comprise A$5.82-million in funding for the Senex-Santos Cooper Basin pipeline project, A$6-million for the Beach Energy Otway Basin exploration project targeting conventional reservoirs, A$3.96-million for the Santos Cooper Basin refracture stimulation project, and A$6-million for the Santos Cooper Basin underbalanced drilling project, as well as A$2-million for the first phase of the Strike Energy Cooper Basin deep coal project.

“Gas is key to lowering power prices in South Australia,” 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.

“There is enough gas in the ground in South Australia to power our grid for centuries, and this package of measures will help us extract more of that gas, boost local electricity generation and put downward pressure on prices,” he added.

Appea’s South Australian director Matthew Doman on Friday said the Pace grants would help bring more gas to market and benefit local businesses and consumers.

He said the four companies awarded grants under the Pace programme were committed to the responsible development of South Australia’s natural resources.

“Industry strongly supports the Pace programme,” Doman said.

“This sensible policy will help ensure a reliable supply of natural gas to meet the energy needs of local businesses and households.”

He added that 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, with recent data from the Australian Bureau of Statistics revealing a 64% 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.”