Special Report: In a bid to combat the East Coast gas shortage, Galilee Energy is seizing opportunities presented by both the Queensland and Australian governments, as it advances one of the largest untapped gas resources on the country’s East Coast.
Galilee Energy (ASX:GLL) is strategically positioning itself to play a pivotal role in securing Australia’s energy future.
The company has inked a non-binding memorandum of understanding with Energy Queensland, a State Government-owned corporation, for the supply of natural gas and to progress the development of a hydrogen facility.
The MoU outlines a framework to progress preliminary talks for the supply of natural gas to the Barcaldine Power Station and lays the groundwork for a potential joint venture in developing a hydrogen facility at the central west Queensland site.
The Queensland government is getting behind the state’s gas industry with the recently announced $21m Frontier Gas Exploration Program for the Galilee and Bowen Basins.
The program, designed to expedite new gas supply, aligns with the government’s vision to fortify energy security and drive the expansion of renewable energy, which aims to constitute 80% of Queensland’s energy mix by 2035.
The Australian government values the untapped gas potential of the North Bowen and Galilee basins at up to $2.5 billion a year, with the ability to deliver up to 5,500 jobs by 2030.
The two basins are extremely gas rich, with an estimated 17,661 petajoules of gas in place –enough to supply the entire east coast gas market for around 10 years. But annual gas production right now is only around 9 petajoules.
Frontier basins crucial for new supply
Ray Shorrocks, executive chairman of Galilee Energy, emphasised the significance of the Galilee and Bowen Basins as “frontier basins” crucial for developing new gas supplies.
Galilee will submit an application in a bid to secure funding under the program for its Glenaras gas project, which stands out as one of the largest untapped gas resources on the East Coast, boasting a certified 3C contingent resource exceeding 5,000 petajoules.
This collaborative effort with the Queensland government is envisioned to encourage the appraisal and development of future gas supply, critically needed as the nation grapples with a rising demand for energy.
The East Coast has already spent a good part of 2023 navigating the supply squeeze, but it is expected that by 2027 the rest of Australia will also be struggling to source gas.
The Australian Competition and Consumer Commission warned late last year that Australia could be staring down the barrel of a gas shortfall 10 times what it was the year before.
This situation, which has been described as “the biggest energy crisis since the oil shocks of the 1970s”, has prompted the federal government to call for submissions to its Future Gas Strategy.
Shorrocks said the Future Gas Strategy discussion paper had identified the Galilee Basin in its projections for future gas supply to 2050.
Galilee Energy is gearing up to make a submission, urging the Australian government to reinstate the Strategic Basin approach.
Eco-friendly credentials
The Glenaras gas project not only offers a massive natural gas resource but also boasts eco-friendly credentials. The production of fresh water from coals for agricultural use and low CO2 levels position Galilee Energy to be a leading supplier of sustainable energy.
The company has continued to make steady progress, most recently having undertaken the first ever 3D seismic survey over the project, which has increased Galilee’s understanding of what’s happening in the subsurface at Glenaras more than at any time in the last decade.
“We see encouraging signs that the impact of the shield wells on reducing reservoir pressure is only now being realised and the pilot is exhibiting signs typical of a reservoir in transition,” Shorrocks explained.
“Galilee now has all the critical information it needs to progress discussion with existing and any potential new counterparties to accelerate commercialisation of the project.”
This article was developed in collaboration with Galilee Energy, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
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