Carbon Energy Ltd., an energy technology provider and services firm in Australia, reported Monday a significant increase in its Proved and Probable (2P) Surat Basin gas reserves to 1 trillion cubic feet (Tcf) or 1,128 petajoule (PJ) of natural gas equivalent or 188 million barrels of oil equivalent (MMboe), transforming the Company into the fifth largest 2P gas reserve in Queensland and more than doubling the Company’s total gas reserves. The upgrade provides a solid foundation for building a Queensland gas business and will support the Company’s plans to develop its first commercial scale gas project in Queensland, the Blue Gum Gas Project.
The Conceptual Plan for development on MDL374 and land owned by the Company in the Surat Basin is the Blue Gum Gas Project. This Project is intended to deliver 25PJ per annum of pipeline quality natural gas from a plant that converts the underground coal gasification (UCG) process’ Syngas to pipeline quality gas. It is anticipated that first gas could be supplied to local industry from 2017, once finding suitable investment partners and receiving State Government approvals.
Based on projected gas prices, the Blue Gum Gas Project could deliver in excess of $3.56 billion (AUD 4 billion) in gross revenue to the Company over a 25 year period and could create more than $178.4 million (AUD 200 million) in royalties for the State. It will create in excess of 1,000 jobs during the construction phase and approximately 150 sustained direct jobs in the region over the 25 years. The Project is located within easy access to markets and close to existing infrastructure.
Carbon Energy’s CEO Morne Engelbrecht said, “This Reserve upgrade reinforces Carbon Energy’s ability to provide the Queensland market with access to a major new gas resource and comes at a time when the east coast industrial and domestic market is facing looming gas shortages. We are planning to bring our Reserves onto the market in time to meet the forecast gas shortages towards the end of the decade.”
“The constraints on the local gas market are going to hit industry particularly hard. We are in discussions with potential industrial off-take partners to supply them with this new source of gas.” Engelbrecht added.
The Company recently submitted a Decommissioning Report to Government which detailed results of more than 2,000 water samples taken over the past 6 years. The results from this rigorous monitoring program demonstrate Carbon Energy’s ability to operate its keyseam technology without harm to the environment or impact on beneficial use of the region’s groundwater.
The Company is currently preparing a Rehabilitation Plan for its Bloodwood Creek UCG trial site. This is on schedule for lodgement with the Queensland Government by the end of September. Carbon Energy is hopeful that it will receive a decision from the Queensland Government allowing it to proceed with the standard approvals process for the Blue Gum Gas Project shortly after submission of the Rehabilitation Plan.
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