A GREEN energy company headed by a former BHP Billiton executive is to assess the potential of a coal-seam gas and oil prospect in Central Australia.
Rohan Gillespie, the head of Energy Infrastructure and Resources, founded and led BHP's coal-seam gas business until it was sold in 2006.
His new company will examine Central Petroleum's tenements southeast of Alice Springs.
The deal provides for EIR to earn a stake in the project in return for funding 60 per cent of initial work programs and paying a "reserve premium" of $10 million per trillion cubic feet of gas or oil equivalent that may be discovered and independently verified.
Central Petroleum managing director John Heugh said the agreement underscored the potential of the 15,000km prospect.
With 270,000km of tenements in NT and Queensland, Central Petroleum is the largest holder of prospective oil and gas acreage in onshore Australia.
Its portfolio includes the majority of the Pedirka and Amadeus basins on the NT-SA border.
The company is cashed up after completing a $26 million renounceable rights issue and subsequent placement of $5 million to raise more than $31 million.
Central Petroleum believes that development of the oil and gas field could lead to a century-long mining operation and the building of a $1 billion gas-to-fuel plant.
Perth-based Central Petroleum said that there there were threedevelopment options:
TO BUILD the processing plant near Alice Springs to convert the gas to diesel.
TO send the gas up the existing south-north pipeline to Darwin for export.
TO sell the gas to the eastern states by building an $800 million pipeline to Moomba in South Australia to join the national grid.
Mr Heugh said the first option was the most attractive because processing the gas in Central Australia would achieve the greatest added value.
Diesel would fetch three times the price of unprocessed gas, he said.
CTP Price at posting:
8.2¢ Sentiment: Hold Disclosure: Held
