Beetaloo Energy has taken a big step towards unlocking long-term appraisal gas production after securing key Federal Ministerial approvals linked to Traditional Owner consent for the sale of gas from its EP187 permit in the Northern Territory.
The sign-off, granted under the Federal Aboriginal Land Rights Act, represents one of the most important administrative hurdles standing between the company and extended appraisal operations in the massive Beetaloo Sub-basin with sales expected to kick off from next year.
The nod from Canberra followed an endorsement by Traditional Owners of the Mambaliya Rrumburriya Wuyaliya Aboriginal Land Trust in June, who backed an agreement allowing the beneficial use, sale or commercial deployment of appraisal gas. That agreement has since been cleared by the Northern Land Council’s Executive Council, effectively completing the Traditional Owner chain of approval as required by Federal lawmakers.
Management says the new green light now clears the path for the final Northern Territory Government approval under section 57AAA of the Petroleum Act, allowing Beetaloo to sell appraisal gas for years to come, while continuing to drill and test its permit.
Importantly, once final State clearance is in the bag, it will also unlock access to a $30 million Macquarie Bank credit facility earmarked for the refurbishment and construction of Beetaloo’s midstream gas plant.
When the company finally turns on the taps, it will be the first time that commercial quantities of shale gas have been produced in the territory. Perhaps more importantly, however, it could also prove once and for all that the sub-basin has the firepower to one day stand shoulder-to-shoulder with Australia’s North West Shelf with Beetaloo now in prime position to lead that charge.
Beetaloo’s giant tenure spans 28.9 million acres across the McArthur Basin and Beetaloo Sub-basin in the heart of the Northern Territory. In particular, the grounds cover the thickest known section of the prized Velkerri Shales which boast an average gross thickness of 300 metres, making it a geological sweet spot for shale gas development.
Independent assessors have already pegged the company’s contingent resource at a whopping 1.6 trillion cubic feet (Tcf) of dry gas in the high-quality 2C category, meaning the discovery is good and has a reasonable chance of recovery.
And that’s just Beetaloo Energy’s slice of the pie. The wider Beetaloo Basin is thought to hold more than 200Tcf of gas, putting Beetaloo squarely in the frame as the owner of what could become one of Australia’s most consequential energy projects for decades to come.
Adding to the emerging producer’s credentials, the Northern Territory Government has signed a long-term offtake agreement with Beetaloo for the gas to help plug a looming supply bottleneck. Under the deal the company is set to deliver a minimum of 25 terajoules (Tj) of gas a day – with an option to lift that to 35TJ if production ramps as planned.
With ENI’s Blacktip offshore field fading fast, the Territory’s main energy supplier, Power and Water Corporation, has been forced into costly emergency gas imports from Queensland and is now pouring millions into pipeline upgrades just to keep the lights on.
In a state where more than 90 per cent of electricity comes from gas-fired generation, the pressure is on and any credible new supply source is bound to draw eager attention.
In short, every molecule of gas pulled from the appraisal program will feed straight into the Territory’s energy system, delivering cheaper power for local homes and businesses and generating royalties that flow back into the pockets of Territorians.
Beetaloo Energy managing director Alex underwood said: “This Federal Ministerial approval is a critical step in the process to seek final NT Government approval for beneficial use of test gas from EP187. Upon receipt of that approval, Beetaloo Energy will be able to continue appraisal drilling and gas sales from EP187 for several years while the field is proven up. Beetaloo.”
The timing of the latest Federal approval could not be sharper given the company’s Carpentaria-5H flow-testing program is now underway and progressing at pace.
Stimulation of the hole fired up in mid-June. Beetaloo’s contractor - oilfield giant Halliburton - mobilised a colossal 42,000-horsepower’s worth of equipment to hammer out more than 60 fracture stages into a 3.3-kilometre stretch of the Velkerri B Shale - the biggest fracture job ever attempted in the Basin.
The operation became a high-octane process, with more than 100 barrels a minute of water and sand driven into the shale to keep the fractures propped wide open. Once the well was cleaned out, it was then allowed to soak for a month before the all-important flow testing got underway.
Results are expected in the coming weeks and should provide fresh clarity around reservoir performance, production capacity and the economics that will underpin any future full-field development.
Beetaloo has spent more than a decade of geological work mapping out a region that promises extraordinary hydrocarbon potential. With major Australian operators accelerating appraisal activity across the wider basin, Beetaloo’s own approvals momentum could now place it in the box seat for the next phase of the Territory’s energy build-out.
All eyes now shift to the Northern Territory Government’s final decision. Should it fall Beetaloo’s way, as expected, the company will gain the regulatory runway to keep drilling, keep testing and selling gas — exactly the trifecta needed to push a frontier basin closer to commercial lift-off.
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By James Pearson
