Gas production in the Northern Territory is expected to increase substantially in output in 2025-26, primarily driven by LNG production from the Barossa gas field once Santosre-opens the Darwin LNG plant later this year and several other aspiring shale producers from the Beetaloo Basin.
The Beetaloo spans an area of about 30,000 square kilometres southeast of Katherine and has extensive gas resources estimated to be more than 100 trillion cubic feet of recoverable shale dry gas, with a liquids upside and strong potential to boost future east coast Australian energy supplies as well as grow LNG exports through Darwin’s expanding terminals.
A unique factor of Beetaloo’s gas is its low carbon dioxide content, making it particularly effective as a replacement for higher-emitting fuels like coal, a backup for renewable power generation, and a feedstock for hydrogen.Research has indicated that Beetaloo’s development could create up to 6,300 jobs, deliver $1 billion in total revenue to the NT government by 2040, and generate $22.4 billion in NT economic growth.
Empire Energy is set to become Beetaloo’s first commercial shale gas producer later this year, having secured a $46-million financing package to fund drilling, completion and flow testing of its Carpentaria-5H (C-5H) pilot development well, and installation of its gas plant.
Empire is nearing its final investment decision for C-5H, which was further supported by the signing of a 10-year binding gas sales agreement with the NT government, and aims to deliveries this year.
The final regulatory approval the Carpentaria project needs is the sale of gas under the NT Petroleum Act’s Beneficial Use ofTest Gas provisions. Empire has also consulted with TraditionalOwners to seek their consent.
Previous drilling enabled Empire to upgrade its Beetaloo gas resources, with a 270 per cent increase in 2C contingent resources to 1,739 petajoules, a 217 per cent increase in 1C contingent resources to 304 petajoules, and a 129 per cent increase in 3C contingent resources to 3,507 petajoules.
Another project scheduled for first production in 2025 is Santos’ Barossa project, which will supply replacement gas to the Darwin LNG (DLNG) plant, which is currently supplied by the soon-to-be-depleted Bayu-Undan field near Timor-Leste.
Gas will be extracted about 285 kilometres offshore from Darwin and transported via pipeline to DLNG, with other project infrastructure including a floating production storage and offloading (FPSO) facility, a subsea production system, and supporting in-field subsea infrastructure.
Up to eight subsea wells are planned to be drilled, with six wells from three drill centres and contingency plans for an additional two wells.
After gas and condensate is extracted from the wells through the subsea production system, it will be transferred to the FPSO via a network of subsea infrastructure.
The FPSO will have a processing capacity of up to 800million standard cubic feet of gas a day and a design capacity of11,000 barrels of stabilised condensate a day. Santos recently signed a non binding memorandum of understanding (MOU) with Beetaloo-focused shale developer Tamboran Resources, with the goal of assessing options for the supply of natural gas from the Beetaloo to a potential second LNG train at Darwin’s Middle Arm peninsula.
Both companies have partnered on Beetaloo’s exploration permit 161, with Santos’ interest 75 per cent and the remainder Tamboran’s.
Joel Riddle, Tamboran Managing Director and Chief Executive, said that with about two million net prospective acre across the basin, Tamboran held significant gas resources capable of supplying the NT and the East Coast gas markets for decades.
Riddle added: “With multiple commercialisation pathway via LNG markets at Darwin and Gladstone, and the East Coast domestic gas market, Tamboran is well-positioned to assess opportunities to accelerate value for our shareholders.”
Tamboran Resources holds net 2C contingent resources of about 1.5 trillion cubic feet, and is targeting first production by the end of 2025.
In late 2023, Tamboran completed its acquisition of OriginEnergy’s gas assets in the Beetaloo, making it the largest acreage holder and operator in the region.
In April 2024, Tamboran signed a binding long-term take-or-pay gas sales agreement to supply the Northern Territory government with 40 terajoules a day for an initial term of nine years from the Shenandoah South pilot project.
Riddle told Petroleum Australia the contract provided a pathway to first production for Tamboran’s pilot project and would directly impact the Northern Territory’s energy security positively.
He said: “We’ve always been focused as a company on first production out of the Beetaloo Basin to serve the benefit of the local community.
“The gas market in the Northern Territory has had significant declines in the last two years, primarily driven by lower production at Eni’s Blacktip offshore field, so energy security has been a significant issue for Territorians.”
Riddle noted that electricity in the NT was mostly sourced from gas-fired power, so having first gas flow out of the Beetaloo would serve the local community. He added: “This is right down the middle of our strategy, which is territory first – we want to see the territory benefit in everything we do.
“It’s amazing how certain LNG projects have been developed. There are two in Darwin and three on the east coast, but none have a domestic gas reservation; all the gas is exported, and nothing is left for the local community.
“We want to do things differently, where we prioritise the local gas market first, and once we have a well-supplied local market we’ll look to export.”
Last year’s NT Budget, which was set out by the previous Labor government before it lost the election to the Country Liberals, highlighted natural gas as a crucial transition fuel to support the shift towards renewable energy and net zero emissions.
The former Minister for Renewables and Energy, Kate Worden, told Petroleum Australia the Territory government was working to build its economy to $40 billion by 2030, with developing the Beetaloo Basin and boosting the onshore gas industry being a significant part of this effort.
Australian Energy Producers NT Director David Slama said at the time the Budget provided for a more sustainable energy future and underscored the importance of gas in Australia’s energy transformation, while helping secure economic ande nergy security benefits by developing onshore natural gas resources.
He added: “The Budget continues to help progress development of the extraordinary opportunity of the Beetaloo Basin and Middle Arm sustainable development precinct, while reinforcing the economic importance of the Barossa project.
“The Budget invests in the industries and projects required for the energy transformation.”
However, the Country Liberals have now ditched the Territory’s 50 per cent by 2030 renewable energy target, which was set by Labor in 2016 and supported by the Country Liberals while in opposition, despite now accelerating natural gas production for that very aim.
