Northern Territory could offer the solution to eastern Australia’s gas woes
Basins such as the Beetaloo, Amadeus and Bonaparte are seeing significant activity
Bonaparte has proven gas fields both offshore and onshore
Much has been made about the expected gas supply crunch that Australia’s eastern states will face in the coming years and equally how new sources of supply are needed to address this.
The AEMO has forecast that the annual supply gap would increase in magnitude from 2028 as southern gas production declines.
This has led to calls for the relevant governments to open up new areas in existing basins, targeting untapped offshore basins, overturning laws preventing the use of fracture stimulation in certain states, and diverting gas meant for export towards domestic use.
Gas supporters are unlikely to find much support from the recently released budget with Treasurer Jim Chalmers saying there won’t be any new money for gas – outside of the already promised $566m over 10 years for GeoScience Australia to map Australia’s soil and seabed.
That said, the federal government’s new gas strategy provides hope that efforts will be made to streamline gas project approvals in order to ensure supply is maintained.
And the conversation about the gas supply shortage and its solutions isn’t just restricted to the eastern states.
The Northern Territory has also seen a fair amount of attention given its own supply woes and rich potential in areas such as the Beetaloo and Bonaparte basins.
Gas supply in the territory has been impacted by the downturn in supply from the offshore Blacktop field to the point that blackouts were experienced.
This same shortfall has led to the closure of the Northern Gas Pipeline (NGP) that transports gas out of the NT to the eastern states, impacting on manufacturing groups such as Incitec Pivot, which had to shut operations in Queensland due to the pipeline closure.
Untapped gas potential
While the NT is facing its own gas supply woes, it also has the potential to not only address its own issues but go a long way towards meeting the needs of the eastern states.
The territory is home to several very significant oil and gas basins, three of which have drawn significantly more attention.
The Beetaloo Basin (in blue). Pic: Department of Industry, Science, Energy and Resources
First up is the Beetaloo Sub-basin, which if its pundits are to be believed will solve all our gas supply woes if only the Federal and territory governments stepped up with regulatory approvals and some funding (pretty please) towards infrastructure or tax breaks for exploration.
At first glance, there’s plenty going for it.
The 28,000km2 sub-basin – part of the larger 180,000km2 McArthur Basin – about 500km southwest of Darwin has been estimated by the NT government to host some 500 trillion cubic feet of in-place gas resources just in the proven Velkerri B layer.
Existing infrastructure includes the Stuart, Barkly, Roper and Carpentaria Highways, the Adelaide-Darwin railway, regional airports and – perhaps most importantly – three existing gas pipelines with the Northern Gas Pipeline linking the Amadeus Gas Pipeline to the East Coast market.
While in-place resources are not considered to be an accurate measure of just how much gas (or oil) is actually present – as it is an estimate of how much gas might be present if the target reservoir was filled to the brim, it nonetheless provides a hint of its potential.
Even if just 10% of this amount is recoverable, 50Tcf of gas is equivalent to about 25 years’ worth of domestic gas demand.
That said while there is little doubt that the target shales in the Beetaloo are prospective for gas, shale formations typically have very low permeability meaning that you often need to drill horizontal sections that require fracture stimulation before you are able to get commercial gas flow rates. Read here for a little explanation into the process.
Despite this, companies operating in this region include major companies such as Santos (ASX:STO) though its focus seems to be elsewhere at the moment along with juniors such as Empire Energy (ASX:EEG) and Tamboran Resources (ASX:TBN) .
Tamboran has demonstrated the ability of the Velkerri B shale to produce gas with its Shenandoah South 1H well flowing 3.2 million cubic feet per day from a 501m stimulated length within the mid-Velkerri B.
The second basin of note is the mature Amadeus Basin that is the source of practically all of the NT’s onshore gas production, specifically from Central Petroleum (ASX:CTP) Mereenie, Palm Valley and Dingo fields.
During the March 2024 quarter, CTP’s sales volumes were down 13% to 1.03 petajoules of gas equivalent due to the closure of the NGP from mid-February though they have increased in April under a new supply agreement with the Power & Water Corporation.
Other companies operating in the Amadeus include Greenvale Energy (ASX:GRV), which holds a 75% interest in EP 145 from Mosman Oil and Gas.
EP 145 hosts an existing best estimate prospective resource of 440 billion cubic feet of natural gas, 26.4Bcf of helium and 26.4Bcf of hydrogen and is on trend with the producing Mereenie oil and gas field.
Preparations are underway for a seismic program that will be completed in August 2024 to guide targeting for drilling in 2025.
Bonaparte has proven potential
The remaining area that could address supply shortfalls in the NT and beyond is the Bonaparte Basin.
Already known as being one of the most successful basins for petroleum exploration and production both onshore and offshore Australia, the success rate at the Bonaparte Basin is extremely high, making it a significant source of liquids and gas to the domestic and export markets.
Notable examples of fields in this area include the shut-in Blacktip field and the Petrel, Tern and Frigate fields that have total undeveloped Contingent Resources of 2.7 trillion cubic feet of gas.
While most of the ~270,000km2 area is offshore, the Bonaparte also includes about 20,000km onshore Northern Territory.
While the onshore area was previously difficult to commercialise due to the lack of infrastructure, this has been addressed by the recent construction of a new highway through the area.
Advent’s RL1 licence. Pic: Advent Energy
This is music to the ears of BPH Energy (ASX:BPH), which holds a 36% interest in unlisted company Advent Energy, as said highway passes within 4.5km of Advent’s Weaber gas discoveries.
Advent holds 100% of RL1 in the onshore Bonaparte that has firm 2C (best estimate) contingent resources of 11.5 billion cubic feet for the Weaber gas field.
Weaber appraisal wells have already proven the ability to produce gas at potentially commercial flow rates.
It recently received a five-year extension to RL1, which BPH managing director David Breeze says places Advent in a position to commercialise the area.
This has the potential to feed the territory’s gas needs.
Nor is BPH the only junior looking to explore the riches of the Bonaparte Basin.
Vintage Energy (ASX:VEN) holds EP 126, which includes the cased and suspended Cullen-1 well that intersected oil and gas shows.
The 6716km2 permit has multiple play types that have the potential to host large volumes though half of the area has been declared a “Reserved Area” by the NT government.
At Stockhead, we tell it like it is. While Greenvale Energy and BPH Energy are Stockhead advertisers, they did not sponsor this article.
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