- World class Beetaloo Sub-basin all set to flow gas in the NT tomorrow
- First commercial production could mark a new phase for Australia’s unconventional shale play
- Plans in place to power Territory Data Centres
- Infrastructure and investment opportunities extend beyond the gas fields
Decades after first being recognised as having the potential for significant exploration opportunities, the Beetaloo Sub-basin in the Northern Territory is about to prove the quality of its world-class shale gas reserves.
Listen to the HotCopper podcast for in-depth discussions and insights on all the biggest headlines from throughout the week. On Spotify, Apple, and more.
From tomorrow, more than 40 terajoules a day will flow straight into the Territory grid from one of the world’s most significant onshore gas reserves, containing an estimated 430 trillion cubic feet (tcf) of gas in place, enough to meet Australian gas demand for 200 years.
While explorers first identified there was something of interest in the giant onshore area, the Beetaloo only really grabbed world attention in 2018 when the US Geological Survey estimated the area contained undiscovered, technically recoverable mean resources of 429 million barrels of continuous oil and eight trillion cubic feet of continuous gas.
However, the broader resource potential of the Beetaloo is considerably larger, with current estimates suggesting the Sub-basin may contain hundreds of trillions of cubic feet (tcf) of gas at a total resource scale.
Those are significant numbers when you consider the world-class North West Shelf venture in Western Australia holds a total estimated gas resource of about 33 tcf.
While the Beetaloo was obviously an intriguing target, there were many which doubted it could ever be cracked.
Its remoteness in the harsh NT outback and the nature of the shale play were a concern, particularly with the fact that development would rely on a significant number of fracking wells, particularly given the environmental and political opposition that surrounded hydraulic fracturing.
However, those concerns began to wane when the Northern Territory fracking moratorium was lifted in April 2018 and subsequent major technology breakthroughs highlighted the potential of horizontal wells to unlock massive amounts of hydrocarbons across vast areas.
Those technology breakthroughs saw the US utilise its shale acreage to transform from being a major oil and gas importer to a word leading exporter.
Now, the NT is set to take its first step in a plan to achieve those same heady goals with its local shale play.
Tamboran Resources (ASX: TBN) is on target to commence first commercial production at its Shenandoah South project tomorrow after a highly technical build up.
The company recently successfully completed stimulation, cleanout and completion activities of the Shenandoah South 3H (SS-3H), -4H and -5H wells in the Northern Pilot Area of the Beetaloo in a major breakthrough.
The program was the first three-well “zipper” stimulation and the largest campaign ever conducted in the Beetaloo, with 178 stages placed across around 30,000 feet within the Mid Velkerri B shale formation.
The stimulation program achieved Beetaloo records in pumping operations exceeding 20 hours per day and 12 stages delivered in a single day.
The wells are now planned to be tied into the Sturt Plateau Compression Facility (SPCF).
The project remains within a $141 million budget, with first gas sales to the Northern Territory government remaining on track.
That milestone could prove important for the entire basin.
Commercial production would provide another piece of evidence that the Beetaloo’s technically challenging shale formations can be developed at scale, potentially opening the door to further drilling, infrastructure investment and development across the wider Sub-basin.
Beyond the gas wells
In another show of how the NT shale plays can fire up new opportunities, Beetaloo Energy Australia (ASX: BTL) has opened the door for Data Centre development in the Top End.
Beetaloo Energy recently signed a non-binding memorandum of understanding (MoU) with Australian Gas Infrastructure Group (AGIG) to conduct preliminary assessments on the building of a gas pipeline from the Carpentaria Gas project to future demand centres in the Darwin area.
“It’s clear there’s an important role the basin could play in the Territory’s future, and our focus is on working with customers and partners to develop the infrastructure needed to support that opportunity,” Beetaloo MD, Alex Underwood, said.
The MoU with AGIG represents another important milestone in progressing Beetaloo Digital.
The Northern Territory government is backing the development of the Beetaloo shale gas reserves to supply domestic energy and power to a proposed $40 billion AI data centre hub.
The government has already agreed to buy up to 40 terajoules (TJ) of gas per day from Tamboran’s Shenandoah South project. That initial deal relied on new Beneficial Use of Gas (BUG) rules.
The Territory also signed a second agreement to purchase an additional 25 TJ of gas per day from Beetaloo Energy Australia.
Taken together, those developments point to something much larger than simply getting gas out of the ground.
The emerging Beetaloo story is increasingly about the infrastructure required to connect the gas with customers — people, pipelines, compression, engineering, construction, power, transport and a range of other services required to support a new energy province.
That could create opportunities well beyond the companies holding the gas acreage.
NT Minister for Mining and Energy, Gerard Maley, said first gas will represent the beginning of a new chapter for the Territory economy.
“The conversation is no longer about what the Beetaloo could deliver, but what it is delivering: investment, jobs, infrastructure, supply chain opportunities and, from today, a new source of reliable and affordable energy for the Territory,” Mr Maley said.
“We recognised that having a world-class resource underground was not enough. We needed to create the right conditions for companies to invest, develop projects and bring that gas to market.”
The Chief Minister said the milestone was only the beginning.
“We are at the beginning of the next chapter.”
For investors, an important question will increasingly become: who is supplying the Beetaloo?
The development of a major unconventional gas province requires a large supporting ecosystem, from drilling and well services through to equipment, logistics, infrastructure and power.
If the Beetaloo moves into a sustained development phase, those companies could represent a second layer of investment opportunities sitting behind the headline gas producers.
With the significant upside available in the Beetaloo and the excitement being generated in Queensland’s Taroom Trough, the future for Australia’s unconventional hydrocarbon plays is becoming increasingly interesting.
The gas may be underground, but the investment opportunity could extend well beyond the wellhead.
Join the discussion: See what HotCopper users are saying right now and be part of the conversations that move the markets.
The material provided in this article is for information only and should not be treated as investment advice. Viewers are encouraged to conduct their own research and consult with a certified financial advisor before making any investment decisions. For full disclaimer information, please click here.