Production

Petroleum

Exploration expenditure for the petroleum industry (including coal seam gas) in Queensland declined for 2007-08, with an expenditure of A$165.5 million compared to A$191.9 million in 2006-07.

As at 1 December 2008, there were 133 granted Authorities to Prospect (ATPs) for petroleum covering more than 337 000 km2.  During 2007-08, a total of seven new ATPs were granted over an area in excess of 34 600 km2.

Queensland's pipeline network continued to expand with five pipeline licences (PPLs) granted during 2007-08 (PPLs 127, 128, 129, 131, 132).

Petroleum exploration (conventional and coal seam gas)

The 2008 Petroleum calls for tenders for ATPs were focussed on the Galilee Basin in central Queensland, plus areas in the Eromanga and Bowen-Surat basins in south-west and southern Queensland.

The area of land made available was approximately 104 000 km2.  The calls for tenders closed on 4 August 2008 and attracted 82 applications for the 21 areas gazetted.

Anyone can request an area to be included in a call for tenders. Requests should be emailed to the Manager, Exploration Strategies.

Information on a call for tenders is available on Queensland Mines and Energy's website.

Conventional petroleum exploration

Conventional petroleum (excluding coal seam gas) exploration in Queensland declined in 2007-08 from the record set in 2006-07.

A total of 70 conventional petroleum wells, made up of 12 exploration, nine appraisal and 49 development wells were drilled in 2007-08.

This compares with a total of 171 conventional wells drilled in 2006-07 and 71 wells drilled in 2006-07.

During 2007-08 four new oil discoveries were made in the Cooper-Eromanga basins.  Santos Ltd made discoveries at Cuisinier 1 and Montegue 1 while Beach Petroleum Ltd had discoveries at Marcoola 1 and Warragon 1.

No new conventional gas discoveries were made in 2007-08.

Conventional petroleum production

Oil production increased with 3.3 million barrels produced in 2007-08 compared to 2.9 million barrels in 2006-07.

Proved and probable oil reserves amounted to 42 465 736 barrels as at 30 June 2008 compared to 44 125 775 barrels as at 30 June 2007.

Conventional gas production continued to decline.  In 2007-08 a total of 2852.15 million cubic metres (Mm3) of conventional gas was produced compared to 3421.77 Mm3 produced in 2006-07.

Proved and probable gas reserves amounted to 14 289.72 Mm3 as at 30 June 2008 compared to 14 675.47 Mm3 as at 30 June 2007.

Conventional petroleum outlook

Exploration for conventional petroleum is uncertain but is likely to remain steady in comparison to 2008.  The level of activity will depend upon the impact of reduced oil prices since mid 2008.

Gas exploration drilling is expected to be undertaken in the proven gas provinces.

Oil production may increase following the extensive oil drilling programs of the last few years whereas the downward trend for gas production is likely to continue.

Queensland coal seam gas

Since 2000, surging exploration and development activity has made coal seam gas a stand-out sector of the Queensland petroleum industry.  Coal seam gas drilling activity continued at record levels and coal seam gas production and certified reserves increased.

Much of the coal seam gas activity has been undertaken to certify additional reserves to underpin the large-scale LNG export facilities proposed for the Gladstone area.

Coal seam gas exploration

During 2007-08, coal seam gas exploration in Queensland continued at record levels with 600 coal seam gas wells drilled, compared to 392 wells in the previous year.

This record drilling activity has resulted in significant increases in coal seam gas production and certified reserves.

During 2007-08, production exceeded 125 PJ compared to around 85 PJ in 2006-07 and is expected to be 130 PJ by 2009-10.

As at 30 June 2008, proved and probable (2P) reserves were 10 680 PJ. This is a significant increase on the 7050 PJ certified as at 30 December 2007. This figure is set to increase even further.

Coal seam gas production

Production and growth in certified reserves from the Jurassic Walloon Coal Measures of the Surat Basin have been the stand-outs during 2007-08.

Production has increased from 17.6 PJ in 2006-07 to 38.3 PJ in 2007-08.  During the same period, 2P reserves have increased from 2349 PJ to 6453 PJ.

Coal seam gas production from the Bowen Basin increased from 68.6 PJ in 2006-07 to 86.9 PJ in 2007-08.  During the same period, certified Bowen Basin coal seam gas 2P reserves have increased from 3640 PJ to 4227 PJ.

Water production from coal seam gas operations continues to increase as more wells are drilled and brought into production.  Water production from producing coal seam gas fields during 2007-08 was 13 455 megalitres.

Water production data from June 2005 suggest that approximately 95 megalitres of water is produced for each petajoule of gas produced.

The ratio of water to gas produced is greater from Surat Basin fields than it is from the Bowen Basin.

It is predicted that the ratio for the Surat Basin will decrease as commercial gas production increases but is likely to stabilise at a higher rate than for the Bowen Basin.

Coal seam gas outlook

Coal seam gas exploration and development is expected to continue to grow during 2009.  This activity is being driven by the continuing growth in the demand for coal seam gas.

Key elements underpinning this demand are the need to find replacement gas for declining conventional gas production for the domestic market and the expansion of the pipeline network providing additional market opportunities.

Increased activity is also being driven by the need to prove up reserves as a potential source of feed stock for the proposed export-focussed liquefied natural gas (LNG) facilities at Gladstone.

Queensland petroleum pipelines 2006-07

There are five pipeline projects that are likely to significantly impact the future development of the petroleum industry in Queensland.

Central Queensland

Central Queensland Pipeline Pty Ltd

The Central Queensland gas pipeline from Moranbah to Gladstone (Pipeline Licence (PPL) 121) will provide a link for gas supply between the northern Bowen Basin and Gladstone, and will facilitate the supply of gas to underpin Arrow Energy's proposed LNG plant in Gladstone.

Enertrade applied for a pipeline licence on 9 December 2005.  The pipeline route was acquired by Arrow Energy Limited and AGL Energy Ltd (AGL) as part of the Enertrade acquisition in November 2007.

PPL 121 was granted on 1 September 2008 to Central Queensland Pipeline Pty Ltd, a 50/50 joint owned venture company of Arrow Energy Limited and AGL Energy Ltd.

Gatton to Gympie

Allgas Pipelines Operations Pty Ltd

The Gatton to Gympie gas pipeline (PPL 32) was granted on 31 March 1998.  Proponents for the pipeline are determining the commerciality of the pipeline and are assessing Sunshine Coast markets.

Queensland to Newcastle and Sydney

Hunter Gas Pipeline Pty Ltd

The 850 km Hunter Gas Pipeline will transmit conventional and coal seam gas from Queensland to Newcastle and Sydney.  The 224 km Queensland portion of the pipeline (PPL 124) was granted on 1 May 2007 to Hunter Gas Pipeline Pty Ltd.

On 13 June 2008 the pipeline was gazetted as critical infrastructure under the New South Wales (NSW) Environmental Planning and Assessment Act 1979.

Plans for the pipeline received a boost with an announcement in May 2008 of an agreement for the pipeline to transport gas for a proposed major new gas-fired power station in NSW.

Queensland to South Australia and NSW

Epic Energy Queensland Pty Ltd

The Queensland to South Australia/New South Wales (QSN) Link pipeline will provide access to interstate markets for Queensland gas.  Epic Energy Queensland Pty Ltd was granted a pipeline licence (PPL 129) for the Queensland portion of the pipeline connecting Ballera to Moomba.  It is a 180 km, 400 mm diameter extension of the South West Queensland Pipeline.

In late 2008, construction of this pipeline was completed and on 13 January 2009 commercial gas flows commenced.  The pipeline will enable gas to be transmitted from the Wallumbilla Gas Hub to markets in southern and eastern Australian states.

Stage two of the QSN Link pipeline will see the addition of two more compressor stations along with the compression required under the first stage expansion of the South West Queensland Pipeline.  Completion of stage two is expected by December 2013.

Casino to Swanbank

Metgasco

In late 2008, Metgasco was evaluating a proposal for a Casino to Swanbank gas pipeline to supply coal seam gas from the Clarence-Moreton Basin in New South Wales to the Swanbank Power Station in Queensland.  This is part of an agreement with CS Energy to develop coal seam gas reserves in this basin.

As at 1 December 2008, no pipeline licence application had been lodged for the Queensland portion of the pipeline.

The route analysis and associated studies were completed in 2007 and the regulatory process for the pipeline licence commenced.

Proposals to construct pipelines to transport gas from the Bowen and Surat Basins to Gladstone for the proposed export liquefied natural gas terminals are currently under investigation by a number of project proponents. 

Last Updated 07 August 2009