BG Expands Gas Drilling in Australia Through WestSide Venture By...

BG Expands Gas Drilling in Australia Through WestSide Venture

By Angela Macdonald-Smith

March 19 (Bloomberg) -- BG Group Plc, the U.K. natural gas company bidding for Australia’s Pure Energy Resources Ltd., is set to expand its search for reserves in Queensland state, with drilling due to start next month in a venture with WestSide Corp.

An A$8 million ($5.4 million) drilling program between BG’s QGC unit and WestSide will seek to confirm coal-seam gas reserves at the Tilbrook project, which could hold almost 3 trillion cubic feet of gas, Brisbane-based WestSide said today in a statement to the Australian stock exchange. The partners will also explore areas to the north of Tilbrook, it said.

BG is seeking reserves in northeastern Australia to supply a proposed liquefied natural gas export project in Gladstone on the central Queensland coast. It entered two joint ventures with WestSide through the friendly takeover of Queensland Gas Co., which it renamed QGC.

Hedley Thomas, a Brisbane-based spokesman for BG’s Australian unit, couldn’t immediately comment, while Angus Karoll, chairman and acting chief executive of WestSide, couldn’t be reached.

The Tilbrook project is to the north of the producing Moranbah coal-seam gas venture run by Arrow Energy Ltd., which was bidding against BG for Brisbane-based Pure Energy.

The second venture between BG and WestSide, involving the Paranui tenements, lies further to the south, within 200 kilometers (124 miles) of BG’s planned LNG plant. Drilling may also start at the Paranui venture next quarter, WestSide said last month.

The partners are each responsible for marketing their own gas from the licenses, in which they have equal stakes.

To contact the reporter on this story: Angela Macdonald-Smith in Sydney at [email protected]

Last Updated: March 18, 2009 23:25 EDT