Queensland Opens Land for Domestic Gas

The Australian state of Queensland has opened more land for gas development with Australia-only sale conditions, the state government said March 1.

Two junior producers – Central Petroleum and Armour Energy – won the latest tenders for development of almost 400 hectares just north of the townships of Miles and Surat in southwest Queensland.

Speaking at the Australian Domestic Gas Outlook conference in Sydney, Queensland natural resources, mines and energy minister Anthony Lynham said the government is meeting its recent election commitment to open land for domestic-only production by releasing more than 6,000 km² for exploration.

“These releases are shoring up Australia’s gas supply – further demonstrating Queensland as a reliable and affordable gas producer,” he said.

Lynham used the opportunity to criticise the bans and moratoria on gas development in other Australian states and Territories, saying it’s not reasonable for them to restrict developments within their borders while being happy to import it from Queensland. The Northern Territory is about to decide whether to end its own moratorium.

“These parcels of land will continue to help in meeting east coast gas supply, they are not a silver bullet,” he 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,” he said.

Central Petroleum and Armour Energy must now negotiate land access agreements and fulfil all existing environmental and Native Title requirements before the Petroleum Lease is granted and work can begin.

Central Petroleum said it is contemplating developing the acreage in support of the long term viability of Incitec Pivot’s Gibson Island fertiliser facility within the state.

“As part of the arrangements being negotiated, Central and IPL are seeking to establish a 50:50 joint venture for the acreage with IPL providing up to A$20mn ($15.44) of funding for exploration and appraisal of the acreage,” the company said.

Armour Energy, which was awarded permits to explore a 318 square kilometre area 17 km north of Surat, said the area will add to the company’s existing portfolio in the Roma Shelf.

“Armour has recently restarted production from its South Western Queensland Kincora Gas Project and we are confident that this new acreage will provide further resources for long term gas production,” CEO Roger Cressey said.

“Additionally, the close proximity of this new tenement to our Kincora Gas Plant means gas resources can be easily connected, processed and delivered to market,” he said.

The move by the government comes five months after the first release of land for domestic supply only, with the first ender going to Senex Energy.