First gas from Australia’s Beetaloo shale basin is scheduled to start flowing next month, with initial production of 37 million cu m, Reuters has reported, noting hopes that the country could replicate the U.S. shale gas success story.
The Beetaloo basin is located in the Northern Territory and is estimated to hold some 500 trillion cu ft of gas. It has been compared to the giant Marcellus shale play in the United States. The government of the Northern Territory is hoping that Beetaloo will turn it into another LNG production hub.
Development of those reserves, however, has been slow, as the industry has focused on conventional deposits for growth in Australia. Now, however, it seems like an opportune moment to move on to shale—especially in light of worries that Australia may begin to experience domestic gas shortages on the east coast before long due to heavy exports under long-term contracts.
First gas from Beetaloo, produced by Tamboran Resources and Beetaloo Energy, will go to the city of Darwin to secure its gas needs while the companies monitor depletion rates in these first wells, Reuters noted in its report. Earlier this year, the chief executive of Tamboran Resources, Todd Abbott, said he expected the company to be pumping over 1 billion cu m of gas daily. According to Reuters, this could add 9% to Australia’s liquefied natural gas export capacity.
Japan is the biggest buyer of Australian gas, which is why Inpex earlier this year made its own bet on the Beetaloo basin with an investment in acreage in the basin it acquired from Formentera Partners.
“You need a party with deep pockets who's willing to deploy billions of dollars over several years before being able to prove up a large-scale commercial play, and they've never had that until now,” MST Marquee senior energy analyst Saul Kavonic said.
By Irina Slav for Oilprice.com
