PERTH (miningweekly.com) – The Queensland government has granted ASX-listed Senex Energy a petroleum lease and preliminary environmental approvals to develop Project Atlas, to supply gas to the domestic market.

Natural Resources, Mines and Energy Minister Dr Anthony Lynham said the grant of Senex’s petroleum lease in the Surat basin meant the company would be supplying Australia’s east coast gas market within two years.

Senex won a pilot tender last year, with the company telling shareholders on Thursday that the award of the petroleum lease was a key milestone for the project, providing the company with on-ground access to progress environmental studies and other preliminary activities for the development of around 100 wells and associated infrastructure.

“Construction work can now begin on the wells and pipelines needed to pump up to 26 petrajoules per year of additional gas into the domestic market. This means domestic gas and regional investment and up to 150 regional jobs,” Lynham said.

The project was expected to deliver first gas to market in late 2019.

Senex MD and CEO Ian Davies said that the company was in detailed discussions with parties to provide gas processing infrastructure, have materially progressed financing discussions with prospective lenders, and was looking to engage with domestic gas customers in the near future.

Queensland Resources Council CEO Ian Macfarlane said on Thursday said the grant of the licence with a domestic-only condition was an example of the state’s leading regulatory framework.

“This pilot guarantees gas for domestic use and avoids the overly prescriptive conditions in a gas reservation policy. Not only will it create 150 jobs but the pilot has been a success in best-practice regulation in action – fast, effective and focused on outcomes,” Macfarlane said. 

“The move that will see Senex supplying gas within two years comes a day after the federal government announced four projects – three in Queensland - to be funded under the A$26-million gas acceleration programme to supply an extra 12.4 petajoules of new gas to the east coast market by June 2020 and an extra 27.6 petajoules over five years.”

Since Senex won its tender, two other Australian producers, Central Petroleum and Armour Energy, have won a further tender to explore for Queensland gas exclusively for the Australian market.

The two local producers will explore a total of almost 400 ha north of the townships of Miles and Surat in south-west Queensland. 

“In Queensland we continue to do the heavy lifting to meet the gas supply needs of Australia’s east coast,” Lynham said.

“I see no reason why other mainland states cannot follow our lead to help secure a sustainable gas industry, including a stable domestic supply.”