Two news items today highlight the growing importance of Eastern Seaboard CSG (Coal Seam Gas) in Australia’s future energy output.
1) From an article by Paul Garvey in today’s Australian Financial Review…
“Santos are believed to be just days away from offloading its suite of undeveloped gas fields in the Bonaparte Basin…“
“Santos has been running a process for the sale of its Evans Shoal, Petrel, Tern and Frigate gas fields off Darwin, which combined host several trillion cubic feet of gas. The company is believed to be eyeing a price tag of about $500 million for the fields, a result of which would more than cover the cost of its recent $476 million purchase of an effective 48 per cent stake in Eastern Star Gas’s NSW coal seam gas fields.”
“Alternatively it eventually settle for a joint venture partner that would carry the bulk of its costs in advancing the assets.”
2) From an announcement by Shell reference the Tipton West CSG assets in Queensland
“Shell CSG (Australia) Pty Ltd has signed a letter indicating that it intends to exercise joint venture pre-emptive rights to take up a share of the Tipton West assets recently acquired by Arrow from Beach Petroleum, subject to corporate, third-party and regulatory approvals.
Arrow Energy Limited (Arrow) will also seek necessary third party consents and final Board approvals.
On finalisation, Shell will pay Arrow A$99 million to obtain a further 12% of the Tipton West Joint Venture. In addition to the initial payment of $99 million, Shell will also reimburse Arrow for 30% of any contingent payments (up to $21 million) that Arrow makes to Beach under the terms of the Arrow/Beach Tipton West sale agreement.”
My Take….
Both news items emphasise the importance of Eastern Seaboard CSG, to some degree at the possible expense of Australia’s North West Shelf deposits. The immense capital cost of developing those North West Shelf deposits may be a factor, since Eastern deposits in Queensland and NSW are more accessible, also poised to serve a readier Domestic market apart from the large Export market.
Arrow Energy purchased Beach Petroleum's 40 per cent interest in the Tipton West coal seam gas (CSG) joint venture for $400 million. Now Shell want their share of Tipton, demonstrating their long term interest in Qld CSG assets.
