Central Petroleum Limited has announced the restart of the Range Gas Project in Queensland’s Surat Basin which is being progressed under a 50:50 joint venture (Range JV) between Central and a wholly-owned subsidiary of Incitec Pivot Limited.
Central outlines that the 77 square kilometre project has the potential to 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 438-kilometre Roma Brisbane gas pipeline or a tie-in to other nearby pipeline infrastructure.
The Range JV successfully completed a gas exploration program in 2019 which exceeded expectations and facilitated a “Development Pending” 2C Resource certification of 270 petajoules (PJ) (135 PJ net to Central), 50 per cent higher than initially anticipated.
Following the operational and financial uncertainty caused by the COVID-19 pandemic and a severe downturn in global energy markets, the Range JV agreed in March 2020 to pause pre-Final Investment Decision (FID) activities for the project.
Yet the outlook for energy markets has stabilised in recent months and forecasts indicate continuing strong demand for new domestic term gas supplies.
Central has also recently strengthened its financial flexibility, having extended its debt facility and signed a new gas sale agreement.
Today the company advised that pre-FID activity will be restarted, including a three-well appraisal pilot program targeted to be drilled in H1 2021, as well as approvals and permits for project development.
Development is anticipated to commence shortly after FID, potentially allowing for first gas production in 2023 as a fresh source of competitive supply to east coast gas markets.
CEO and Managing Director of Central Petroleum, Leon Devaney, said the new gas sale agreement and restructured finance facility announced last week, combined with continued resilience in term gas markets, gives Central the flexibility and confidence to restart Range.
“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 on stream in 2023. Combined with a multi-tcf prospect at Dukas, an exciting exploration program in the Amadeus Basin, good progress toward a preferred farmout partner, and a proposed Amadeus to Moomba Gas Pipeline (AMGP), we have a significant amount of value-adding activity to look forward to,” he said.