We’ve previously detailed the positive natural gas exploration and development examples coming out of Queensland, including the economic impact to the state, and yet again the region is ready to show the rest of the country how to get the job done.
The Queensland Government’s Mines Minister Dr Anthony Lynham recently announced that Santos and its joint venture partners – TOTAL, Petronas, KOGAS and APLNG – had gained rights to explore for more gas in the Bowen Basin in Queensland’s south-west.
“This area holds significant gas resources, which will further add to the gas being produced by workers here in Queensland and made available for domestic use and export markets,” Dr Lynham said.
Santos Executive Vice President, Exploration and New Developments Bill Ovenden said the tender was ideally located.
“Being adjacent to the Santos-planned Arcadia project means the company will be able to leverage existing infrastructure, reduce development costs and produce more gas,” Mr Ovenden said.
Another gas major APLNG recently gained a 95 square kilometre petroleum lease in the Surat Basin.
“This area has the potential to produce 251 billion cubic feet of gas over the next 30 years,” Dr Lynham said.
APPEA Queensland Director Rhys Turner said the announcement was the latest in a string of new Queensland projects aimed at bringing more gas to market.
“In the past year we have seen significant announcements from Arrow Energy, Shell Australia, and Senex to bring on new supply,” Mr Turner said.
“At the end of February, Santos announced that it would spend close to a billion dollars on its Roma East project, while APLNG is expected to spend $3 billion on activities this calendar year.”
The consistent string of exploration and development announcements coming out of Queensland makes a strong case for other states and territories, who currently have bans in place, to make their own contribution to Australia’s energy needs.
Only recently, AEMO released an update to its Victorian Gas Planning Report outlining the need for “additional gas production, alternative supply or other measures to meet natural gas demand in winter 2021”.
The willingness of the Queensland Government to function as a solutions provider rather than an industry inhibitor sets an example for states like Victoria whose ban on onshore drilling and development creates an obvious impediment to energy security into the future.
And in addition to energy security – the economic impact is no doubt another key driver for Queensland.
In 2016-17 alone, the economic impact that the CSG sector has had on Queensland has been substantial. For example, there was:
- $635 million in wages paid to 4,156 full time employees;
- $3.4 billion spent on goods and services, benefitting 3,091 local businesses while also benefitting 169 community organisations; and
- contributed $97 million in royalties which were shared across the state, while only using 0.1% of Queensland’s land mass.
As new acreage is open for exploration, we anticipate the economic value to the state to continue – and that’s a positive outcome for not only the Government but for employees, contractors, community organisations and regional areas eager to receive the various economic stimuli that industry contributes.
And while we are on the topic of industry generated benefits, let’s not forget that as more gas comes online, the impact on end-user pricing could be significant – in favour of consumers.
As detailed in the Australian Competition and Consumer Commission’s Gas inquiry 2017-2020 Interim report, “gas users in the Southern States are relying on gas produced in Queensland to be transported into the Southern States to meet their needs”.
“The gas shortfall in the Southern States can add at least $2/GJ and possibly up to $4/GJ to the prices paid by gas users in those states. In addition, access to pipeline capacity, particularly on the key north to south transport routes, is increasingly important to market participants.”
So, the solution would appear relatively simple, ‘be like Queensland’. It’s time to open up the avenues for safe natural gas development to support end-users by securing an affordable energy supply while providing an outlet for economic stimulus.