State Gas receives A$5.5mn grant for gas exploration in Queensland
Sydney-listed State Gas has secured A$5.5mn ($3.6mn) in exploration grant funding from the Queensland government's Frontier Gas Exploration Programme, it said on May 10. This funding aims to advance the exploration of gas resources within the Rolleston West coalbed project by drilling two new vertical wells.
The success of this grant application hinges on State Gas' capability to capture and utilise gas from new wells instead of flaring it. This approach aligns with the assessment criteria for the grant, emphasising the rapid delivery of new gas supply to Queensland and the East Coast domestic market.
The company's exploration permit, ATP-2062, is located within the Bowen Basin's Denison Trough, known for its prolific gas production. The Bandanna formations in this area contain coal measures that yield high-quality gas, akin to nearby gas fields.
State Gas has already identified substantial gas resources within the project area, totaling 279 petajoules of contingent resources. Preliminary production testing on existing wells has demonstrated commercial productivity, with a stabilized flow rate equivalent to 0.5 terajoules of pipeline-quality gas per day.
With the grant funding, State Gas plans to drill two new vertical wells adjacent to existing productive areas. These wells aim to intersect the entire Bandanna Formation coal measures, maximising reserves potential and potentially supporting pipeline connections to the national grid.
The company anticipates several benefits from these additional wells, including further delineation of gas resources, demonstration of commercial viability for larger-scale projects, and immediate supply of new gas to the market. Moreover, increased gas production will support local coal mining operations seeking to reduce emissions by switching to high-density natural gas (HDNG) instead of diesel.
"Qualifying for this exploration grant funding is a strong endorsement for the Rolleston West project and the company. It demonstrates that the Queensland government shares State Gas' view that the area is highly prospective and capable of supporting new gas project development," State Gas' executive chairman, Richard Cottee, said.