Empire Energy Group has been given the green light from the Northern Territory Government to seek production approvals for its gas projects in the Beetaloo sub-basin – a game-changing moment for the area’s development of the vast resource.
The move comes after the government finalised all 135 recommendations from a 2018 inquiry into hydraulic fracturing. The company says the government’s new framework sets the scene for gas production approval in the region, including for its EP187 Carpentaria pilot project.
According to the NT Government, all applications made for gas production in the Beetaloo sub-basin — subject to the industry’s successful exploration and appraisal results — will go through a rigorous approval and monitoring process.
Empire says the regulatory framework the government has put in place is among the most extensive and robust in Australia and will allow the safe and sustainable development of the Beetaloo’s abundant natural gas resources.
Hydraulic fracturing (fracking) is a technique for recovering gas from a prospective shale rock. Companies can maximise gas production rates by optimising the placement of a well’s fractures along the target zone by piercing the reservoir with a chemical mixture known as “fracking fluid”.
According to the final implementation report from the inquiry, the NT Government is now satisfied that risks identified during the review have been sufficiently mitigated and it is confident that applications for onshore petroleum production licenses may now be accepted for consideration by the new regulatory regime.
Empire Energy Group managing director Alex Underwood said: “Building on the encouraging results of our exploration activity over the last four years, we look forward to submitting applications for all required approvals to enable us to move into gas production and the delivery of much-needed new gas supply to the Australian domestic market, and subsequently to increase LNG exports, already the NT’s largest source of foreign income and a significant contributor to Federal Government revenues.”
In 2018, the Scientific Inquiry into Hydraulic Fracturing, chaired by Justice Rachel Pepper, independently concluded in its final report that industry risks could be managed if all of the inquiry’s recommendations were implemented.
During the past four years, the Territory Government has been working to implement the recommendations by undertaking comprehensive baseline studies and developing multiple assurances for the regulation and monitoring of an onshore gas industry.
It includes strict new requirements that must be met before exploration and production approvals are granted, including new mandatory requirements relating to well integrity and well decommissioning, the granting of sacred site clearances and comprehensive on-site water monitoring programs being in place.
In April, the Australian government released its final consultation paper for the mandatory code of conduct (Gas Code), which seeks to secure more gas at reasonable prices for Australian consumers feeling the heat for turning up the heat.
Under the code, small gas producers will be exempt from the price cap, currently set at $12 per gigajoule, if they supply only the domestic market – another win for small gas producers. Empire already has local customers in mind after signing a memorandum of understanding in 2021 with the NT Government-owned Power and Water Corporation for the potential sale and transportation of gas.
In the same year, the company inked a deal with APA Group that would see the duo explore opportunities to develop mid-stream infrastructure in the Beetaloo sub-basin, including gas and liquid gathering, processing and pipelines.
The APA deal includes the dual strategic objective of the expansion of Darwin’s LNG export facilities and the construction of a pipeline to Mount Isa. The pipeline in turn would allow gas to be moved to the east-coast domestic markets and exported as LNG through Gladstone.
Empire is currently investigating the front-end engineering, design and regulatory approvals process for its Carpentaria pilot project, which will underpin a final investment decision slated for later this year.
The company says it also expects to provide a resource upgrade for the project ahead of its annual general meeting scheduled for the end of this month.
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By Michael Philipps
