PERTH (miningweekly.com) –  An onshore natural gas industry could mean greater financial independence for the Northern Territory, an Australian Petroleum Production and Exploration Association (Appea) said at a Northern Territory Parliamentary inquiry.

Appea Northern Territory director Steven Gerhardy said that royalties from shale gas extraction could become an important revenue stream for the territory, increasing financial certainty for future governments and reducing their reliance on tied commonwealth funding.

He pointed out that natural gas projects were already transforming the Northern Territory economy.

“Natural gas is delivering significant economic and environmental benefits to the Territory through job creation, energy security and reduced greenhouse emissions,” Gerhardy said.

“Liquefied natural gas (LNG) projects in operation or under construction are providing and will continue to provide jobs and opportunities for decades to come.”

He pointed to the A$34-billion Ichthy’s LNG project being developed by Inpex, saying the company was spending more than A$5-billion through Territory-based businesses during construction of its LNG plant in Darwin.

The project is also expected to create up to 5 000 new jobs during its construction phase and up to 700 new jobs when operational.

“While still in its very early stages, the potential for an onshore natural gas industry based on the Territory’s substantial shale gas reserves is just as exciting.

“Not only would shale gas deliver jobs, economic growth and improved infrastructure in remote and regional areas, it would also provide the Territory government with its own source of revenue independent of the commonwealth.

“This is a potential game-changer for the Territory, which currently relies on commonwealth funding for around 80% of its annual budget,” Gerhardy said.

He added that maximising future oil and gas investment in the Territory would require a competitive and stable investment environment and a continuing commitment to market-based policies.

The Territory government was currently investigating the viability of developing unconventional oil and gas fields in the region. A number of shale gas targets have already been identified.

During October and November last year, the government held a number of community meetings to present facts about the regulatory regime for the unconventional gas industry.