PERTH (miningweekly.com) – Oil and gas major Senex has announced plans to invest more than A$1-billion in a major expansion of its Atlas and Roma North natural gas developments in Queensland.
The company on Thursday announced that it would increase its natural gas production to 60 PJ/y with work planned to begin in coming weeks. First gas from this major investment is targeted to deliver supply to the domestic market within two years.
Gas production of 60 PJ/y represents more than 10% of yearly east coast domestic gas requirements, around 40% of Queensland’s domestic gas requirements, and is equivalent to the electricity used by more than 2.7-million homes each year.
“This new investment to significantly boost domestic natural gas supply supports Australia’s energy security and continues to underscore Queensland’s position as are reliable energy provider,” Senex CEO Ian Davies said.
“Senex prides itself on supporting the production of natural gas for the Australian market. It was only three years ago Senex began supplying the east coast market from Queensland’s Surat basin and to date has already invested more than half a billion dollars in new supply.
“The willingness of our new owners POSCO INTERNATIONAL Corporation and Hancock Energy Corporation to commit significant additional new capital allows Senex to bring critical new gas supply to market, essential for manufacturing, industry, homes, hospitals and electricity generation – beyond which was possible prior to their acquisition of Senex earlier this year,” Davies said.
“The recent electricity crisis proved natural gas is critical to providing secure and reliable energy for Australians and is needed to underpin renewables and replace aging coal generation, without which electricity costs will further rise, while infrastructure and technology is developed to support increased renewable generation,” he said.
The Australian Petroleum Production & Exploration Association has welcomed the investment, with acting CEO Damian Dwyer saying the massive investment would help secure Australia’s energy future and ensure local natural gas keeps flowing to manufacturers, homes and businesses.
“Recent pressures on the energy system showcase the need for more investment such as this by Senex to ensure the supply and investment required for Australia’s energy security. More secure, reliable and affordable natural gas supply has never been more critical following recent major coal-fired generation outages and coal supply chain challenges, renewable generation not stepping up and immense pressures on the global energy market due to the Russian invasion of the Ukraine.
“It also underscores that industry has, and always will, respond to any concerns around energy security and further highlights the critical importance of developing new gas resources.
“This accelerated response by the oil and gas industry confirms the growth and opportunities in the sector and highlights gas will play a key role for a long time to come.”
Dwyer added that supportive investment settings to position Australia more competitively in global markets would open up significant opportunities for further industry investments.
“It brings home how critical the right investment policy settings are as Australia continues its journey to a cleaner energy future, underpinning high-quality jobs and the energy security required for our nation’s future,” he said.
The Queensland Resources Council (QRC) noted that the investment by Senex would deliver an estimated A$200-million boost to regional businesses and local communities and would create more than 200 construction jobs and 50 permanent roles.
"Today's announcement by Senex underlines the importance of investment in new projects that can deliver the gas the East Coast needs to support manufacturing and other types of industry,” QRC CEO Ian Macfarlane said.
“The most effective way to ensure gas consumers have access to affordable and reliable energy to power industry is to increase investments in gas supply and new projects. It's reassuring to see investors in Queensland gas projects continue to take the lead on new projects that underpin energy security for Australia.
“Gas will be increasingly important for Australia and our trading partners, as economies make the transition to lower emissions activities and work towards net zero emissions goals,” he said.
“This expansion by Senex demonstrates the best path forward to shoring up Australia’s energy security and will be welcomed by the market."
Macfarlane said it was more important than ever that investors have the confidence to make significant investments in resources and energy projects.
"A stable regulatory and royalty regime is essential to providing companies with the confidence to invest significant capital towards new projects,” he said.
"No state should be complacent that investments in resources and energy projects of this scale will go ahead without a steady and reliable regulatory framework, on which companies can base long-term investment decisions.”