Five exploration and development projects have shared $24 million (Aus.) in the first round of a South Australian government funding scheme known as the Plan for Accelerating Exploration (Pace) Gas Grants.
South Australian Minister for Mineral Resources Tom Koutsantonis said the grants will generate as much as $174 million (Aus.) in new investment by oil and gas companies in local production projects.
Gas extracted through the grant scheme will be offered to South Australian electricity generators first. It is hoped that this will increase affordability of supply and put downward pressure on power prices.
The five projects are:
• $5.82 million for the Senex-Santos Cooper basin pipeline scheme.
• $6 million for the Beach Energy Otway basin exploration project targeting conventional reservoirs.
• $3.96 million for the Santos Cooper basin refracture stimulation project.
• $6 million for the Santos Cooper basin underbalanced drilling project.
• $2 million for the first phase of the Strike Energy Cooper basin deep coal project.
The grants are an attempt to alleviate the tightening supply of gas across Australia due to the large amounts of LNG being exported overseas and the moratoria on exploration onshore Victoria, New South Wales, and the Northern Territory.
The Australian Energy Market Operator (AEMO) has forecast that this supply shortfall will result in an electricity supply shortfall in South Australia, New South Wales, and Victoria in 2018-19 unless gas supply is boosted and bans and moratoria are lifted.
The Pace initiative was first conceived and launched in 2004, but the gas grants are the first to be awarded under the scheme. The government has announced it will run a second $24-million (Aus.) round soon.
In addition, the South Australian government plans to offer a new exploration licence (one tenement) of five blocks in the onshore Otway basin in the south east corner of the state. This will be done through a competitive bidding process to be finalised by yearend.
