Bring on The Beetaloo

Good to see the Federal Government now backing the Beetaloo alongside the NT Labor Government

Business

Canberra cash to fast-track Origin shale gas project

JOHN DURIE

4 April 2019

The Australian

31

Origin and Santos have a combinedmarket value of $30 billion yet taxpayers are spending $8.4 million to helpfast-track development of shale gas projects in the Beetaloo Basin, 600km southof Darwin.

Granted the money is not large givenOrigin will be spending close to $100m to develop its site, but the question isjust why are taxpayers spending money on a shale gas basin which is beingcanvassed by the big companies that stand to make a fortune from the fields.

No one could dispute thedesirability of more gas for the Australian market, and the government arguesthe money highlighted is really just to do things that government always doeson such projects.

Northern Territory Chief MinisterMichael Gunner is certainly not complaining because anything that mightencourage more private investment in the area is an obvious bonus. In herreport on the basin last year, Justice Rachel Pepper said even small-scaledevelopments could create more than 6500 jobs and a $2.8bn economic benefit tothe Territory and more than $9bn in benefits for the nation over the next 25years.

The $8.4m is apparently forenvironmental baseline work, a feasibility study and an Aboriginal economicstrategy to support development of the region.

The project is aimed at helping thelocal government in identifying and prioritising gas projects.

The study is also aimed toinvestigate options to support gas flows to Darwin for export or use indownstream gas industries.

The money would also help theTerritory meet some of the 135 recommendations from the Pepper report to helplaunch the basin as a prospective gas field.

Origin first called out the prospectin early 2017 and after the delay caused by the Territory moratorium, it isready to start further test drills in a couple of months. It had alreadydrilled four wells before the moratorium was imposed by the Gunner governmentpending the Pepper inquiry.

Origin is working with Irish-basedFalcon Oil & Gas on the project and is the most advanced of the majors inthe region.

Given the high prices for domesticgas in Australia, the ACCC and the federal government have urged the Victorianand NSW governments to end their moratoriums on exploration.

The money being made available is asign that the feds will be prepared to step in to help develop new onshore gasproduction.

The aim is to link the Beetalooproject with the 622km Mount Isa to Tenant Creek Northern gas pipeline, whichthen connects to the main East Coast grid.

The gas is aimed to be available ataround $6 a gigajoule, below the $10 price now quoted.

Origin and Santos are both playersin the Gladstone LNG project, which is exporting gas to the Asian market awayfrom domestic industry.

The case for developing more gas isclear; the question is just who should be doing the groundwork given Origin andFalcon will be enjoying the proceeds should its next wells prove successful.