Origin3 Apr 2019 15:53
APRIL 4, 2019
Origin and Santos have a combined market value of $30 billion yet taxpayers are spending $8.4 million to help fast-track development of shale gas projects in the Beetaloo Basin, 600km south of Darwin.
Granted the money is not large given Origin will be spending close to $100m to develop its site, but the question is just why are taxpayers spending money on a shale gas basin which is being canvassed by the big companies that stand to make a fortune from the fields.
No one could dispute the desirability of more gas for the Australian market, and the government argues the money highlighted is really just to do things that government always does on such projects.
Northern Territory Chief Minister Michael Gunner is certainly not complaining because anything that might encourage more private investment in the area is an obvious bonus. In her report on the basin last year, Justice Rachel Pepper said even small-scale developments could create more than 6500 jobs and a $2.8bn economic benefit to the Territory and more than $9bn in benefits for the nation over the next 25 years.
The $8.4m is apparently for environmental baseline work, a feasibility study and an Aboriginal economic strategy to support development of the region.
The project is aimed at helping the local government in identifying and prioritising gas projects.
The study is also aimed to investigate options to support gas flows to Darwin for export or use in downstream gas industries.
The money would also help the Territory meet some of the 135 recommendations from the Pepper report to help launch the basin as a prospective gas field.
Origin first called out the prospect in early 2017 and after the delay caused by the Territory moratorium, it is ready to start further test drills in a couple of months. It had already drilled four wells before the moratorium was imposed by the Gunner government pending the Pepper inquiry.
Origin is working with Irish-based Falcon Oil & Gas on the project and is the most advanced of the majors in the region.
Given the high prices for domestic gas in Australia, the ACCC and the federal government have urged the Victorian and NSW governments to end their moratoriums on exploration.
The money being made available is a sign that the feds will be prepared to step in to help develop new onshore gas production.
The aim is to link the Beetaloo project with the 622km Mount Isa to Tenant Creek Northern gas pipeline, which then connects to the main East Coast grid.
The gas is aimed to be available at around $6 a gigajoule, below the $10 price now quoted.
Origin and Santos are both players in the Gladstone LNG project, which is exporting gas to the Asian market away from domestic industry.
The case for developing more gas is clear; the question is just who should be doing the groundwork given Origin and Falcon will be enjoying the proceeds should its next wells prove successful.
https://www.theaustralian.com.au/
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