Empire Energy has ramped up its Carpentaria gas pilot project in the Northern Territory by acquiring AGL’s fit-for-purpose, 42-terajoule per day Rosalind Park gas plant for a cash payment of $2.5 million.
The company says the facility exceeds the standards set by its technical due diligence process and estimates the acquisition will shave about a year off its pilot plant timeline and save it more than $30 million when compared to costs for new building alternatives.
The pilot plant has a design target capacity of 25 terajoules (TJ) per day, which is greatly exceeded by the new purchase. The company says it is aiming to reach a final investment decision for the pilot plant in the coming months.
AGL used the Rosalind Park plant to support its Camden gas project, which had been producing natural gas from the Sydney basin since 2004 until it ceased production in August this year.
The gas plant is currently in storage in Roma, Queensland and will undergo a refurbishment prior to being transported to the Top End, where it will be put to work on Empire’s flagship Beetaloo Sub-basin project. It will dry and compress the natural gas before it is piped to Australia’s hungry east coast market.
The company says that after the drilling of development wells and connecting the project to the McArthur River Pipeline in next year’s dry season, it will aim for commercial production from Beetaloo by early 2025.
Empire Energy Group managing director Alex Underwood said: "This comes at a critical time for energy security for the NT market, given that existing sources of supply continue to decline. Success at the Carpentaria Pilot Project would achieve two critical goals for Empire and its shareholders: one, the generation of material cash flow to support our ongoing growth, and two, demonstration of the long-term deliverability of development wells in the Beetaloo Basin, all while reducing the emissions that would otherwise result from flaring test gas.”
The company holds a commanding position in the NT’s Beetaloo Sub-basin through its 100 per cent-owned subsidiary Imperial Oil & Gas, with more than 28 million acres in the highly-prospective ground. Carpentaria-3H is within the company’s flagship exploration permit EP187, about 650km south-east of Darwin, which the company says holds a best-estimate (2C) contingent resource of 1.5 trillion cubic feet (TCF) equating to 1739 petajoules (PJ) of energy.
In August this year, Empire reopened the Carpentaria-3H well following about five months of soaking after being shut-in. Gas flowed at an average rate of 3.3 million standard cubic feet (MMscf) per day (which equates of 3.8 TJ of energy per day) in the first 30 days, an increase of 30 per cent over pre-soak testing. No well intervention was needed as the flow rate was sufficient enough to lift wellbore fluids in 4.5-inch (11.4cm) casing.
Carpentaria-3H’s pre-soak flow numbers followed immediately after a 40-stage fracture stimulation at the well, covering 1989m of the 2632m horizontal hole section within the Velkerri shale reservoir. The increased flow rates seen after soaking prove the practice to be effective for improving gas flow rates and may increase total gas recovery of the life of the well.
The company says flow testing is continuing at Carpentaria-3H to further refine a production-type curve for the Velkerri shale before incorporating it into the ongoing front-end engineering design process for the pilot plant.
With full ownership and a massive gas resource, Empire seems poised to be able to service the Australian east coast gas market at just the right time, with supply becoming increasingly under question.
The Australian Competitor and Consumer commission report in June this year forecast an east coast gas surplus of just a 27 PJ for next year if gas producers export all uncontracted gas. The southern States are expected to experience a gas supply shortfall, requiring Queensland gas to be transported south and stored.
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
By Andrew Duffy
