Central Australia Site Passes CBM GTL Pre-Feasibility...

Central Australia Site Passes CBM GTL Pre-Feasibility Study



Australia's Central Petroleum says that a pre-feasibility study shows that coal bed methane in the Perdika Basin in Central Austral could be developed for a gas to liquids (GTL) plant.

A geological report and pre-feasibility study Central Petroleum had commissioned showed recoverable coal bed methane (CBM) in its lease areas were between a low of 25 trillion cubic feet (tcf) and a high of 50 tcf, the company told the Australian Stock Exchange.

The best estimate of recoverable CBM was 35 tcf based on coal cut-off at a depth of 1,250 meters below the surface, it said.
The study looked at utilizing the gas at a potential large-scale GTL plant located at Alice Springs in the Northern Territory. It suggests CBM could be delivered to the factory gate at Alice Springs at $2.20/million cubic feet.
If recoverable reserves are able to be proved, the low estimate for a 140,000 b/d GTL plant would be 1.4 billion cubic feet per day or 0.5 tcf per year of gas. Meanwhile, a smaller 50,000 b/d plant would require reserves of only 9 tcf, Central Petroleum said.

Such an operation could break even at $30/barrel with an operating cost of
$6.50/bbl, it added.
The company would need to undertake detailed seismic reprocessing, analysis of drilled coal at nearby Blamore and Avalon followed by scout drilling at the initial phase of further formal investigation of this project.

In January, Central Petroleum geologist John Heugh made a presentation to delegates at GTLtec 2007 in Doha, in part outlining findings in the Perdika Basin-Madigan/Eringa Troughs.

He told the gathering that there were 30,000 Km2 of coal that had CBM potential. In addition, he said there were proven petroleum systems there, but no wells to date in the more mature Madigan/Eringa trough. However, there were two oil prospects ready to drill with 200 million bbls potentially to be recovered.


Source: Central Petroleum


Central Petroleum feels that in order to make CBM extraction economically viable, it would need to be converted to a liquid as the CBM source in Central Australia is remote in relation to international markets and even to domestic Australian markets.

Additionally, GTL products can be sold for the price of oil plus about 20% and can be transported by rail from Central Australia at about A$2.50/bbl (U.S. $2.03/bbl) to Port Darwin facilities for domestic Australian or international markets.

Selling the CBM via the gas pipeline in Central Australia is difficult as it is carrying near capacity now and there is no upside with escalating oil prices.



Source: Central Petroleum


Heugh said Central Petroleum figured the cost of building a GTL plant in Central Australia would be about the same as building one in Qatar.

After building a small pilot plant, Central Petroleum's initial conventional drilling program may support further plant development to10-50,000 b/d.



Source: Central Petroleum


Later development of the Perdirka Basin could support a plant the size of the Pearl plant that Shell is building in Qatar of around 140,000 b/d, he said.



Source: Central Petroleum



--Suzanne McElligott