Photo by: Bloomberg
PERTH (miningweekly.com) – The Queensland government has tipped ASX-listed Senex Energy as the preferred tenderer for a petroleum lease in the Surat basin, to supply gas to the domestic market.
Senex has been awarded 58 km2 of tenements in the Surat basin coal seam gas acreage, which hosts an estimated recoverable gas volume of 201 PJ, with about 100 well locations proposed.
Senex MD and CEO Ian Davies said on Tuesday that the company welcomed the opportunity to be part of the solution in delivering new gas supply to domestic customers on the Australian east coast.
“Senex applauds the proactive steps taken by the Queensland government to increase the supply of gas for Australia’s east coast. With extensive experience and a proven track record, Senex has been entrusted to deliver this important energy resource to market.”
Davies said that the company planned to engage with domestic customers in early 2018, with a view to signing gas supply contracts, with first gas targeted in 2019.
Natural Resources and Mines Minister Dr Anthony Lynham said the tender was a pilot for using provisions of resources legislation, for the first time, to direct gas to the domestic market.
“Around 150 jobs are expected to be created and Senex expects to invest over A$200-million on wells and infrastructure over the project’s life. Importantly, this land is adjacent to existing gas infrastructure, which will help to fast-track production from wellhead to market,” Lynham said.
Senex must now negotiate land access agreements and fulfil all existing environmental and Native Title requirements before the petroleum lease is granted and work can begin.
Lynham said following the success of this tender process, a second tendering opportunity would shortly be announced for two areas north of Surat in the Bowen and Surat basins.
“We are working to increase supply to the gas market and encouraging new local entrants. I would encourage companies to make their bids to develop these new areas,” Lynham said.
The Queensland Resources Council has welcomed the tender award, with CEO Ian Macfarlane saying the high-quality gas acreage would translate into an increase of reliable gas supplies into the east coast electricity market.
“Once again, Queensland is leading the way in securing Australia’s energy position by taking a proactive approach to energy prices by increasing supply with an Australian-only sale condition,” Macfarlane said.
“This announcement demonstrates Queensland is getting on with the job of opening up new gas supplies while political interference in New South Wales and Victoria has completely stalled gas exploration.”