QUEENSLAND GAS MARKETS At over 5% per annum, Queensland has the highest growth rate in natural gas consumption of all Australian states and currently has 25% of its total natural gas requirements met by CBM. Given the location of its reserves in ATP564P and PL94, Molopo is ideally positioned to substantially contribute to this growth.
Importantly, CBM is a resource that is taking on increasing significance in Queensland. Government policy favours its development, as evidenced by the recent decision to award Enertrade and CH4 Pty Limited the Townsville Power Station gas supply contract.
A major incentive for CBM producers has been the Queensland Government’s "Queensland Energy Policy – A Cleaner Energy Strategy" released in May 2000. The policy is intended to increase the use of gas as an energy source, requiring 15% of electricity sold in Queensland to be derived from gas or renewable energy, by 1 January 2005. In 1999/2000 gas fired electricity generation consumed approximately 16 Petajoules (PJ) which represented around 3.5% of total electricity supplied. To meet the 15% gas-fired target by 2005 (assuming 2% is supplied by renewables) will require 73 PJ pa or an additional 57 PJ pa. A number of power generation companies are beginning to focus on purchasing gas to fulfil this requirement, and Molopo is positioning itself in this regard.
The eastern Bowen Basin reserves are adjacent to the Gladstone to Wallumbilla pipeline which currently supplies natural gas to Queensland’s central coast markets. There is potential to sell between 60 and120 PJ pa into the rapidly developing Gladstone and Rockhampton region and a further 30 to 60 PJ pa to other markets via backhaul to Wallumbilla.
MPO Price at posting:
0.0¢ Sentiment: LT Buy Disclosure: Held
