Central Australia's Shale Potential Attracts US Players

Central Australia's shale gas potential has started to attract energy giants from the United States.

A leading energy investment bank in Houston, Texas, this week branded the Cooper Basin one of the best shale prospects outside North America, The Australian newspaper said.

A report released by Tudor Pickering Holt (TPH) says that healthy gas flow rates, strong gas prices and existing infrastructure could cause investors to sit up and take notice of the region, the newspaper added.

The eyes of both potential international sharemarket investors and energy companies are now firmly fixed on planned horizontal drilling in the basin to see if the technology that turned a US gas shortage into a glut can be replicated here.

"We see Australia's Cooper Basin as one of the most likely near-term, commercial shale/tight gas developments outside of North America as it ticks most of the boxes for a successful unconventional gas development," The Australian quoted from the report TPH.

In February this year, Chevron agreed to acquire working interest in two of  Beach Energy’s onshore gas blocks covering an estimated 810,000 acres in the Cooper Basin in central Australia. 

The agreement provides an opportunity for Chevron to explore, evaluate and assess the potential for natural gas from shale and tight gas development in these two blocks.

TPH said a key risk would be how the economics of shale gas compared with coal-seam gas in Queensland, and whether there was enough LNG capacity to support full-scale development, given limited local demand.

"This may be an issue similar to that seen in the US, where prolific productive capacity caused the gas price to crater."

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