PERTH (miningweekly.com) – The Western Australian government has passed legislation to allow the state’s gas resources to be developed, signing a natural gas agreement with joint venture (JV) partners Buru Energy and Mitsubishi.

Premier and State Development Minister Colin Barnett said the legislation was an important step in opening up the onshore Canning basin, which had the potential to make a significant long-term contribution to Western Australia’s economy and stimulate economic growth. 

The gas reserves were located between 2 km and 4 km below the surface and had the potential to meet future domestic gas market requirements.
 
“Tapping this vast resource will guarantee Western Australia’s domestic gas supplies well into the future,” the Premier said.

“The gas is owned entirely by the state government, and this agreement ensures gas discoveries are rapidly brought into production, and that before any gas is exported it is delivered to West Australians through the state’s domestic gas network.”

The agreement between the state government and the JV partners facilitated the development of a domestic gas project and pipeline, and covered five exploration permits over a 25-year period, with the option to extend for a further 25 years.

Buru and Mitsubishi have committed to the continued exploration, appraisal and, if technically viable, the development of gas resources on the permits. The state agreement was targeting the delivery of at least 1 500 PJ of gas into the domestic market over a 25-year period.

The two companies are required to submit a proposal for the development of a domestic gas project and pipeline by the end of June 2016.

Barnett noted that once the domestic gas project was under development, the agreement provided for potential future gas supply for gas export.

Buru executive director Eric Streitberg noted that the state agreement was a unique and important step in the assessment and potential development of what could be the largest onshore gas resource in Australia.

“This is a very positive development for Buru and the industry here in the state, and we fully agree with the recent statement by the director-general of the Department of Mines and Petroleum that Western Australia’s shale gas potential is quite amazing, and could spark the next great resources boom.”

Streitberg noted that with the security of the state agreement, the JV partners could now continue their programme, turning the currently identified resources into reserves.

Meanwhile, Barnett noted that the US Energy Information Agency had estimated the onshore Canning basin might contain 229-trillion cubic feet of shale gas resources, without taking into account additional tight gas resources.

This was almost double Western Australia’s known offshore gas resources and was the largest shale or unconventional gas accumulation in Australia.