Seeds for a new unconventional natural gas crop are being sown in Australia after repeal last year of a hydraulic fracturing moratorium opened up a fertile geological field in the southern continent’s counterpart to Alaska, the Northern Territory (NT).
Falcon Oil & Gas Ltd. and Origin Energy have hired a rig contractor and set a target date of June to start horizontal drilling and fracturing two wells in an estimated US$46 million resource appraisal campaign.
As a prospecting firm incorporated in British Columbia (BC), with Alberta industry veterans on its board and an operations headquarters in Ireland, Falcon is an international pioneer on a fossil fuel frontier the size of Texas.
Origin, an Australian fuel and power conglomerate, is expanding a supply and marketing network that includes operating coalbed methane production for an international liquefied natural gas (LNG) exporter, Australia Pacific LNG.
After a public inquiry, the NT last year lifted a fracturing moratorium from the majority (51%) of its 520,764 square miles, giving industry a fresh hunting ground as big as 261,232-square-mile Texas.
Falcon and Origin hold 4.6 million acres of NT gas prospects described as liquids-rich in a largely untapped interior region known as the Beetaloo Basin. Early estimates by Australian earth science agencies rate the territory’s gas potential at 244 Tcf, led by 169 Tcf in the Beetaloo.
The drilling program responds to favorable legislative and regulatory changes enacted to enable activity approvals. While devising plans for an Australian version of the Alberta Energy Regulator and the BC Oil and Gas Commission, the NT government has assigned authority over field operations to its environment and natural resources ministry.
The NT has an industry-friendly record under its current Labor government, as well as its previous Country Liberal Party regime. A 622-kilometer (373-mile) gas pipeline was completed in December for US$570 million. In October, US$37-billion Ichthys LNG began exporting more than 1 Bcf/d of offshore production from Darwin on the NT’s Pacific coast.
In announcing repeal of the territorial fracturing moratorium last year NT Chief Minister Michael Gunner predicted that, as in Western Canada, responsible policing of industry would make shale production safe and bearable in Australia.
“We promised to be a government that restores trust, listens to the community and creates jobs,” said Gunner. “We promised an independent, scientific inquiry after which we would either ban fracturing or allow it in highly regulated circumstances in tightly prescribed areas. We have kept our promise.
“We have accepted the key finding” of the inquiry report, he said, “that if all the recommendations are implemented, the risk from fracturing can be reduced to an acceptable level.”