First shale gas flows into national grid October 19, 2012 - 1:07PM Paddy Manning
Commercial shale gas production has begun in Australia with Santos announcing this morning its Moomba-191 shale gas well in the Cooper Basin had been connected to the eastern states' gas grid.
Santos reported strong initial flow rates from the same well in August and this morning James Baulderstone, the company's eastern Australia vice president, said connection of the well was "a significant step forward as we work to unlock the vast unconventional potential of the Cooper Basin".
Santos said the well was only 350 metres from the existing pipeline network and eight kilometres from Moomba's gas processing plant, enabling it to be brought on line quickly. Further drilling is planned for the area, including an ongoing vertical well appraisal program and Santos' first horizontal shale well planned for early 2013.
"While this is the first commercial shale well, and more work will be required to unlock the area's full potential, this is clearly a landmark for Australia's natural gas industry," Mr Baulderstone said. "Producing commercial quantities of natural gas from the Cooper's shale rock formations would provide the potential for ongoing energy security for South Australia and our eastern states, plus valuable export revenue."
Advertisement Shale gas production has boomed in the US in the past decade, overtaking coal seam gas extraction and lowering energy prices worldwide. In a global study the US Energy Information Administration estimated that "technically recoverable" shale gas resources in Australia could be as high as 396 trillion cubic feet (tcf) and Geoscience Australia has produced a similar estimate. This is significantly larger than the estimated 235 tcf of discovered and undiscovered CSG in Australia, according to Geoscience Australia.
South Australian Premier Jay Weatherill said connection of the well was "the first step in the next wave of Cooper Basin development that will lead to natural gas from unconventional sources being increasingly used in households across SA and eastern Australia more generally".
Santos is building the massive $US18.5 billion Gladstone LNG project in Queensland, due to come on line from 2014, and is struggling to find enough gas to supply the project. Yesterday Santos reported a 6 per cent jump in September-quarter production to 13.5 million barrels of oil equivalent, compared with a year ago, and reported record quarterly sales revenue of $851 million. At midday today its shares were up 15¢ or 1.3 per cent to $11.94.
Santos has a 67 per cent interest in the South Australian Cooper Basin Joint Venture. The other participants are Beach Energy (20 per cent) and Origin Energy (13 per cent).
(source: www.smh.com.au)
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