QLD Mining and Energy Bulletin
Issue link: http://ebook.aprs.com.au/i/42546
HAS QUEENSLAND ENTERED THE THE INTERNATIONAL ENERGY AGENCY? Anthony Fensom reviews the state of play across the Bowen, Surat, Cooper-Eromanga Basins where it appears all is sunny for the Sunshine State's gas industry. With some $50 billion of investment forecast in the state's coal seam gas (CSG)/liquefied natural gas (LNG) industry, a number of CSG-LNG projects at Gladstone achieving final investment decision on their projects and renewed takeover activity, the prospects appear sunny for the Sunshine State's gas industry. And while the recent focus has been on CSG, the conventional oil and gas sector continues to grow, with the prospect of additional energy from other unconventional sources such as shale gas. While record fl oods may have delayed activity at the start of 2011, recent quarterly activities reports provided by the listed companies in the sector demonstrate their commitment to increased investment and exploration. This snapshot of the current state of play across the Bowen, Surat, Cooper-Eromanga and other areas fi nds increasing evidence [16] QLD Mining and Energy Bulletin Spring 2011 that the so-called "golden age" is in sight, bringing enormous economic benefi ts for Queensland and Australia. Bowen and Surat Basins CSG has been the hot topic in Queensland for much of 2011, and not always for the reasons that the industry may have wished for. Yet despite increasing regulatory and landholder scrutiny, the industry continues to advance, as seen by the FIDs achieved on the Gladstone LNG (GLNG), Australia Pacifi c LNG (APLNG) and Queensland Curtis Island LNG (QCLNG) projects and with potentially even more for Gladstone. Origin Energy reported in its June 2011 quarterly production report that APLNG's non-binding agreements with Sinopec had become binding as of April 21, subject to government approvals and FID. Under the agreement, APLNG will supply Sinopec with up to 4.3 mtpa (million tonne per annum) of LNG for 20 years, with Sinopec gaining a 15% stake in the project. Production operations were restored to near pre-fl ood levels, with drilling activities comprising 26 development wells and 29 exploration/appraisal wells. Origin's drilling and testing program is expected to be fully operational from the September quarter. On July 28, APLNG announced FID on the fi rst phase of a two train CSG to LNG project. Shipments are planned from mid- 2015 from the project, with a US$20 billion capital cost for the two trains and nine mtpa capacity. It said advanced discussions were underway with potential customers for off- take from the second LNG train. APLNG also announced an increase in 2P reserves to 11,775 petajoules (PJ) and for 3P to 14,742PJ as of June 30, representing Australia's largest CSG 2P reserves base. The resource base includes an additional 10,050 PJ of 3C contingent resource. The project is expected to create 6,000 construction jobs and 1,000 jobs during operation, and contribute signifi cant annual royalties to the state government. In the Bowen Basin, production at Origin's Spring Gully project partially recovered from previous fl ooding, with gross peak gas sales averaging 121 terajoules per day (TJ/d) during the quarter. At the Fairview fi eld, 15 development wells were drilled with average gas production of 116 TJ/d (APLNG share 28 TJ/d), while 13 exploration and appraisal wells were drilled focusing on the Reids Dome Beds play. At the Peat project area, average gas sales were 8 TJ/d, while the Reids 1 well in ATP 592P encountered signifi cant volumes of coal. In the Surat Basin, fl ood recovery efforts continued at the Talinga/Orana Project Area. Production averaged 88 TJ/d during the quarter, with six new wells brought online. The majority of gas produced from Origin's Surat Basin fi elds is sold to its retail business. At ATP 620P (Kenya) production averaged 52 TJ/d (APLNG share 21 TJ/d) and PL 247 (Bellevue) production averaged 8 TJ/d (APLNG share 2 TJ/d). Eleven development wells were drilled in PL 228 during the quarter. QGC also drilled nine exploration and appraisal wells in ATP 620P and ATP 648P. A further 11 pilot wells were commissioned by Origin in the June quarter across several ATPs in the Surat Basin. QLD PETROLEUM & GAS INDUSTRIES