PACE Gas delivers
Locally produced and competitively priced gas.
Two rounds of PACE Gas grants totalling $47.8 million were paid to companies in 2016–17 and 2017–18. These grants support a strong and diverse portfolio of projects in the Cooper and Otway basins that are expected to result in more than $223 million of industry co-funding (Fig. 1).
The PACE Gas grant program aims to bring forward industry investment that will increase the supply of locally produced and competitively priced gas to South Australian markets. The PACE Gas grants target 217 petajoules (PJ) with upside potential to unlock more than 1,950 PJ of South Australian gas.
PACE Gas discoveries and additional production will generate royalties and deliver gas from fields located nearer to South Australian markets than from interstate. This latter factor translates into lower transport costs and should deliver proportionately lower prices to gas users.
The department’s Energy Resources Division is currently focused on monitoring progress on the nine PACE Gas supported projects. Round 1 projects must deliver gas by end 2019 and Round 2 by end 2020. Early production results include over 1,000 terajoules (TJ) or 1 petajoule (PJ) of natural gas produced for South Australian customers in the 12 months since February 2018.
Highlights so far include:
- Haselgrove 3 (Beach Energy) discovered a significant new gas field in the Otway Basin with an 87 PJ contingent resource.
- Gemba 1 (Senex Energy) discovered a new gas field in the Cooper Basin.
- Two re-fracture stimulation and underbalanced drilling projects in the Cooper Basin (Santos-operated) are now producing gas to South Australian markets.
- The Vanessa East Pipeline (Senex–Santos–Beach) began delivery of gas in July 2018. The gas is being sold under a gas supply agreement to Pelican Point Power Ltd for use in South Australia including the gas-fired Pelican Point Power Station.
In 2018 the Commonwealth Government established the Gas Acceleration Program (GAP) which mirrors PACE Gas. Both programs aim to bring forward exploration and production of gas to meet demand and put downward pressure on prices. In March 2018 Beach Energy was awarded a GAP grant of $6 million to construct a new gas plant at Katnook in the state’s South East. The plant will provide a pathway to customers for Haselgrove 3 gas as well as from any other new discoveries in the region.
– Elinor Alexander, April 2019