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Australia’s state and territory leaders appear to have listened to industry’s calls for more investment in the nation’s gas sector with a string of new grants and acreage awards. After years of dwindling support, the ongoing East Coast energy shortage has finally attracted significant government investment in emerging gas plays as well as a range of field developments in central Australia.
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South Australia, in particular, has moved strongly to support gas, which can help its electricity supplies while its renewable developments stabilise.
Vintage Energy (ASX:VEN) is one of the first to benefit from any South Australian government moves to fund new gas developments. The company and its joint-venture partners are set to receive a grant of up to $5 million from the government for the drilling of two gas production wells.
The granting of $2.5 million each to the PRL 211 and ATP 2021 joint ventures is part of a total of $15M in grants made by the gov’t under the SA Gas Incentive Grant.
Vintage managing director, Neil Gibbins, said the grants are expected to provide up to 50% of the gross joint venture funds needed to drill the Odin-3 and Vali-4 gas wells, proposed for later this calendar year.
“The grants will go directly into wells intended to increase gas supply for electricity generation in South Australia,” Mr Gibbins said.
Bass Oil (ASX:BAS) and the Kiwi liquids-rich gas project in the Cooper Basin will be another winner heading into CY26 and beyond, after receiving a $3.5M grant to connect and bring the discovery online.
During a production test in late CY24, the Kiwi-1 well achieved commercial production rates of 4.1M cubic feet per day (mmcfd) of gas along with 988 barrels of condensate per day (bcpd), with flow levels limited by condensate storage capacity.
Bass Oil’s managing director, Tino Guglielmo, said that the company is progressing options for the remainder of the project funding, including ongoing discussions with parties interested in farming into the project.
“This is a significant milestone towards bringing Bass’ Kiwi gas project online and an important first step to opening a valuable new liquids-rich, Triassic gas play in the northern Cooper Basin,” he explained.
Elsewhere, Santos (ASX:STO) has agreed to key terms with the SA government for the supply of 200 petajoules of gas over 10 years from CY30. That particular deal for the long-term supply of gas will support the transformation of the Whyalla Steelworks into a low-emissions green iron facility.
Even Victoria, the long-time bane of the gas industry, is coming to the party: The minister for energy and resources has invited tenders for petroleum permits in two offshore areas in the Otway Basin and Gippsland Basins.
The VIC gov’t says the permits, the first released since CY18, are aimed at boosting domestic gas supply as existing reserves are expected to deplete by CY27.
Elsewhere, the Northern Territory government continues to champion the oil and gas sector, in particular the Beetaloo Sub-basin. It has announced a new acreage release for approximately 4,000 sq. km, more than five times the size of Singapore, strategically located near the Amadeus Gas Pipeline.
Minister for mining and energy in the Territory, Gerard Maley, said Beetaloo has been recognised as the next big global shale play.
The other big new Australian oil and gas play, the Taroom Trough, recently featured in a Queensland government permit release.
Omega Oil & Gas (ASX:OMA), Tri-Star Stonecroft, and Drillsearch Energy have been appointed as preferred tenderers to explore for gas and petroleum in the Taroom Trough in South-West Queensland.
The government, the backbone of current gas developments on the east coast, said the Taroom Trough has the potential to open up Australia’s first major new petroleum provinces since the 1970s.
Australia’s east coast faces a tight gas market in CY26, with potential shortfalls threatening southern states of Victoria, NSW, Tasmania and SA as demand outpaces local production, requiring surplus supply from Queensland LNG exporters.
High prices and supply risks have prompted government intervention, including a 15% domestic gas reservation scheme for exporters.
Australia only has to look over the ocean to New Zealand to see what a failed gas policy can do, with that nation facing record energy prices and now having to pay for an LNG import terminal to cover the shortfalls.
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