The Queensland government has granted Central Petroleum authority to prospect for gas in a 77-square-kilometer chunk of the Surat Basin.
Central Petroleum (ASX:CTP) has been granted authority to prospect in the Surat Basin by the Queensland government, with the condition that any gas produced be sold domestically.
Anthony Lynham, minister for natural resources, mines and energy, made the announcement Wednesday (August 29), explaining that the green-lit venture will help local jobs.
“Central Petroleum has said it will supply gas to one of Queensland’s largest manufacturers Incitec Pivot Limited [(IPL)] with gas produced to be used to power the Gibson Island fertilizer plant,” he said.
“Securing a reliable, long term supply of gas is a win-win for Central and IPL and will support the ongoing employment of 400 local workers,” Lynham added.
Central Petroleum was awarded exploration permits for 77 square kilometers in the Surat Basin in March. Queensland had been on the hunt for explorers to supply more gas to the east coast market.
In late June, Central Petroleum agreed to a 50/50 joint venture with IPL for the acreage; IPL is to fund up to $20 million for the exploration program.
“Having met all the regulatory requirements, Central Petroleum has been granted approval to explore for gas just six months after being announced preferred tender under Queensland’s Exploration Land Release Program,” Lynham said.
According to the press release, Central Petroleum is aiming for production by 2022; gas to IPL’s Gibson Island plant will come from the company’s assets in the Northern Territory during the interim period.
Central Petroleum’s acting CEO, Leon Devaney, spoke about how the company is highly anticipating exploring the Surat Basin coal seam gas acreage.
“We look forward to working together with all stakeholders to responsibly develop a successful project that provides much needed gas into the east coast market and contributes to preserving the Queensland manufacturing industry,’’ Devaney said.
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Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.