Exploration Area chart (25851 bytes) Units of two U.S. companies developing independent power projects (IPPS) internationally have agreed to explore Queensland's coal fields for methane.
The Australian search by Enron Exploration Australia Pty. Ltd., a unit of Enron Corp., Houston; and Dominion Energy Inc., a unit of Dominion Resources Inc., Richmond, Va.; will focus on coal fields on 9 million acres in the eastern Galilee basin of Queensland's Cutback.
The companies were granted the right to assess the area's gas potential under a permit issued by the Queensland Department of Minerals & Energy.
Gas reserves tapped by the joint venture could be sold into commercial and industrial markets in the cities of Brisbane, Gladstone, and Townsville in eastern Queensland.
Dominion and Enron agreed to jointly explore the Galilee basin tract after an earlier Enron funded $4 million exploration program revealed that coal seams in the area could yield gas reserves amounting to as much as 1 tcf, 100% more than existing reserves in the state.
Dominion will finance the next exploration stage, a $4 million campaign to include drilling of two wildcats this year.
If 1995 drilling on the tract confirms earlier findings, an initial 10 well development program is to get under way, with incremental expansions expected as long as economic results are positive. Development spending by Dominion and Enron could amount to as much as $80 million each.
DEVELOPMENT OVERVIEW
Preliminary exploration by Enron included drilling five core holes to penetrate the Aramac and Bandanna coal strata at 3,000-4,500 ft. Cores showed commercial methane content in net pay of about 80 ft widespread over the area.
Development plans call for operator Enron Australia and Beaconsfield Energy to spud the two 1995 wildcats in May at sites about 15 miles apart. Following completion, both wells are to be placed on extended production tests through yearend.
joint venture partners expect to evaluate field data in first half 1996 and begin drilling the first 10 development wells about midyear.
By then, plans to lay a pipeline to move 100-150 MMcfd of Galilee coal seam gas into eastern Queensland should be final. Still in question is exactly which companies could become involved in building, owning, and operating the gas transmission line.
Full development on the Galilee tract could entail drilling as many as another 150 wells during several years. Partners estimate a 160 well coalbed development program on the tract could recover about 800 bcf of gas.
SYNERGISTIC RELATIONSHIP
The Enron Australia-Dominion Energy joint venture builds on an existing relationship between two companies with operating units involved in a wide range of synergistic programs.
Enron pipeline companies own and operate four interstate and two large intrastate gas pipeline systems in the U.S. and Canada with more than 41,000 miles of line combined, as well as 3,900 miles of pipeline in Argentina.
Upstream, Enron operating units rapidly are becoming international gas producers. The company began exploring for gas in Australia in 1992. Enron units also provide gas, gas liquids, and electric power merchant services in the U.K., Canada, Germany, Argentina, Philippines, Trinidad, and India.
Dominion Energy is an independent generator of electrical power in the U.S. and Argentina with interests in partnerships that own and operate 16 IPPS. The company this spring in Belize expects to complete construction of its 17th IPP.
Parent company Dominion Resources also owns Virginia Electric & Power Co., a large U.S. independent power company.
Dominion Energy and Enron Corp. since 1988 have jointly owned and operated two gas fired cogeneration plants in Texas and hold a joint financial interest in another gas fired cogeneration plant in New Jersey.
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