Australia's Origin Energy has resumed exploration in the highly prospective Northern Territory-based Beetaloo shale gas basin after activity was suspended in March due to COVID-19, the company said Sept. 21.
"The Kyalla well, successfully drilled in January, will now be fracture stimulated followed by a period of production testing over the coming months. Initial results from this are expected by the end of the year, with full results in the first quarter of 2021," the company said.
While the basin itself is undeveloped, the Northern Territory was for the first time last year connected to the gas-strapped east coast, which is home to the vast majority of the country's population.
And the development of the basin is a key part of the Australian government's plan announced last week of a "gas-fired recovery" to the economic downturn caused by the pandemic.
The Liberal-National Coalition set aside A$28.3 million for unlocking five basins, starting with the Beetaloo, and Queensland's North Bowen And Galilee basins, and A$10.9 million to support national gas infrastructure.
A spokeswoman for Origin said there is no relation between the company's decision to recommence its Beetaloo activity and the government's announcement.
"We welcome support for priority gas basins like the Beetaloo, because while it will be transformative for the Northern Territory, factors such as its remote location make it challenging in terms of connecting the resource to the east coast market," she said.
EnergyQuest said in the week ended Sept. 19 that there have been gas resources of 6.6 Tcf identified at Beetaloo, 9.7 Tcf at North Bowen and 2.5 Tcf at Galilee.
"Government support to unlock these basins would be worthwhile. However, it is early days yet for the Beetaloo and the NT government also has plans for energy-intensive manufacturing in Darwin," the energy consultancy said.
Credit Suisse analyst Saul Kavonic said the basins are still too immature to justify infrastructure spend and the government's plan might lead to "industry shaking their tin cups to seek Government funds to either subsidise projects they would have done anyway, or projects that don't make sense without taxpayer dollars."
The gas plan also flagged the government's intent to make new domestic supply agreements with the three east coast LNG exporters, which include Origin's Australia Pacific LNG, with strengthened price commitments.
