News

GAS CRISIS: What it means for drilling in Surat Basin

MORE drilling of gas is expected in the Surat Basin area over the coming years as coal seam gas companies look to shore up more domestic gas supplies.

The predictions from key experts in the resources sector come after Prime Minister Malcolm Turnbull announced possible restrictions on the level of gas that could be exported from Australia, in the wake of increasing domestic prices thanks to low supply.

EnergyQuest CEO Graeme Bethune, who analyses the production levels and outputs of gas companies across the country, said the problem was partly because of producers buying into the domestic market to meet their overseas demands.

Mr Bethune pointed out Santos GLNG was one of these companies, and said the consortium needed to drill more than ever.

"In terms of the total wells that have been drilled in the Surat Basin, GLNG has 600 wells, QPLNG has 1600 and QCLNG has drilled over 2400 since 2010-2011," he said.

"To be fair (to Santos GLNG), they are increasing their rate of drilling but they've not drilled anywhere near enough so they're buying from the domestic market.

"They're even buying gas from offshore Victoria to meet their demand."

The export restrictions are expected to be implemented by July 1, after talks between the Federal Government and gas producers failed to prove there would be an adequate supply.

Ian Macfarlane.
Ian Macfarlane. Kevin Farmer

MACFARLANE WANTS STABILITY IN SPOT GAS MARKET

Queensland Resources Council CEO Ian Macfarlane said the domestic energy crisis would result in more activity in the Surat Basin as Santos and QCG looked to fill their contracted export quotas out of Gladstone with its overseas partners.

But he said the issue wasn't helped with an expensive spot market, where gas was sold outside of existing contracts.

"People buy gas two ways - they either take long-term contracts, or if they get short of gas they've to go to the spot market," he said.

"The spot market is not a reflection on the global price (and) the spot price is higher here than it is in Japan.

"We've got to solve the short-term problem, to keep it under $10/gigajoules.

"It's also the industry goal, because we want to put stability back into the market."

On top of encouraging more drilling in the Surat Basin and longer-term plans to connect fields in the Northern Territory and Western Australia, Mr Macfarlane said NSW was not supplying enough of its own gas to feed the east coast demand.

"The gas industry in Queensland was set up based on the premise that NSW would look after itself," he said.

"NSW stumbled and fell because the greenies didn't want that developed.

"In the same time frame that we spent $70 billion, NSW did nothing - there's not one producing well in NSW."

Topics:  csg industry surat basin toowoomba


Stay Connected

Update your news preferences and get the latest news delivered to your inbox.

Australia's biggest wind farm coming to Darling Downs

WIND POWER: Australia's largest wind farm is set to be built in the Darling Downs north of Dalby by AGL and GE.

Wind farm will produce enough energy to power 260,000 average homes

Sex tape sequel: Man caught on camera slapped with penalty

SEX SLAVES: Human trafficking will be discussed at the upcoming Splendour Immerse Women Conference at Gayndah's ACC Church. Photo Brandon Livesay / Central & North Burnett Times

Offender exposed himself on pool table in beer garden

Your snaps could help us understand artesian springs

Travel snaps of Great Artesian Basin springs could help the government document their unique ecosystems.

Holiday snaps could help government protect springs

Local Partners

Severe fire danger warning for Darling Downs regions

AUTHORITIES are warning of severe fire conditions across the Darling Downs, Granite Belt and Maranoa regions due to recent weather patterns.

Jemma's bewitching voice

STAGE PRESENCE: Suzie Mathers and Jemma Rix in a scene from Wicked The Musical.

Wicked musical theatre star Jemma Rix has released her debut album.

This laughter yoga video will have you in fits of giggles

BEST MEDICINE: Karen Flannery is spreading happiness through laughter throughout Hervey Bay.

New members needed for a laughing good time

Dancers show off skills at Toowoomba Eisteddfod

Milla Rowbotham and Rebecca Gill from All Star Dance Academy .Toowoomba Eisteddfod, Empire Theatre. August 2017

Poems and dances dominated the 72nd City of Toowoomba Eisteddfod

Radio host Matt Okine leaps to small screen

Funnyman talks about the inspiration behind his show, The Other Guy.

Hollywood’s new highest paid actress

Jennifer Lawrence had to settle for third this year behind Emma Stone and Jennifer Aniston.

CAN you guess who has dethroned Jennifer Lawrence?

Movie trailer dubbed too racy for TV

Alicia Vikander stars in Tulip Fever.

THE trailer for Tulip Fever is so saucy some networks have banned it

Liz Hurley, 52, has never looked better

She’s definitely not shy to pose in a bikini.

Life in your 50s has never looked as good as it does on Liz Hurley.

Big Bang Theory star spills details about Season 11

Mayim Bialik plays Amy Farrah Fowler on The Big Bang Theory.

MAYIM Bialik has shared some details about what fans can expect.

The Bachelor Australia: Awful joke leaves Matty stunned

Sharlene’s mouth hangs agape after her car crash breakup.

I’m actually one of the bachelorettes — I’m not the external caterer

Samsung set for bigger, beach friendly Note 8

Samsung will be going bigger than ever to launch its Note 8 after this year's launch of the S8.

Water, dust, now sand-resistant?

EXPLAINED: What the 'Costco effect' means for Ipswich

PRICE WARS: A Costco store similar to this one in Canberra, is planned for Ipswich.

Exclusive 'cult' about to change how families do grocery shopping

4800 homes to be built in massive new Coast estate

Masterplanned community full steam ahead - it's not Caloundra South

Open for inspection homes August 17 - 23

Check out this weekend's homes open for inspection.

Airbnb, Stayz and co tipped to squeeze Coast housing market

HOLIDAY BOOM: Airbnb letting is putting a further squeeze on long-term rentals.

Councils exploring options to manage the industry

How we got a rental straight away on the Coast

Rita and David Allara, moved down from Townsville, paid three months up front rent to secure the place at flash new unit block in Kings Beach.

Genius move helps secure rental property

Ready to SELL your property?

Post Your Ad Here!