The proponents of a Surat Basin gas project say its reinstatement on the development books shows optimism about future demand coming out of the pandemic.
Central Petroleum Limited has announced the restart of the Range Gas Project which is being progressed under a 50:50 joint venture between Central and a wholly-owned subsidiary of Incitec Pivot Limited.
Central told the ASX this morning that the joint venture will restart activities required to reach a final investment decision, including a three-well appraisal pilot program targeted to be drilled in H1 2021, as well as approvals and permits for project development.
That decision is targeted at the end of 2021 with development anticipated to commence straight afterwards. This would allow first gas production in 2023 for supply to east coast markets.
The project is looking to develop a 270 PJ resource.
The 77km2 project could comprise up to 143 producing wells over the life of the field, with gas processed on site and transported to market via a new pipeline connecting to the Roma- Brisbane gas pipeline or a tie-in to other nearby pipeline infrastructure.
They were pleased with the restart said CEO and MD, Leon Devaney.
“The new gas sale agreement and restructured finance facility announced last week, combined with continued resilience in term gas markets, give us the flexibility and confidence to restart Range,” Mr Devaney said.
“This is a major area of growth for Central which we believe will be a very competitive new source of gas for the east coast market when the project comes onstream in 2023 … we have a significant amount of value-adding activity to look forward to.”
The Range JV completed a successful gas exploration program in 2019 which exceeded expectations and facilitated a ‘Development Pending’ resource certification.
Following the operational and financial uncertainty caused by the COVID pandemic and a severe downturn in global energy markets, the Range JV agreed in March 2020 to pause pre-FID activities for the Range Gas Project, the company told the ASX.
In recent months, the outlook for energy markets has stabilised and forecasts indicate continuing strong demand for new domestic term gas supplies, they said in a statement.