Carbon Energy claims Queensland’s fifth largest 2P gas Reserve

THE ROADHOUSE BOWSER: Carbon Energy (ASX: CNX) has announced an increase in its Proved and Probable (2P) Surat Basin gas Reserves to 1,128 petajoule (PJ) (1 trillion cubic feet (Tcf)) of natural gas equivalent or 188 million barrels of oil equivalent (mmboe).

The company said the result has made it the fifth largest 2P gas Reserve in Queensland and has more than doubled its total gas Reserves.

Carbon Energy said the upgrade supports its plans to develop its first commercial scale gas project in Queensland, the Blue Gum gas project.

The company explained the Conceptual Plan for development on MDL374 and land it owns in the Surat Basin is the Blue Gum gas project, which is intended to deliver 25PJ per annum of pipeline quality natural gas from a plant converting the underground coal gasification (UCG) process’ Syngas to pipeline quality gas.

Carbon Energy anticipates first gas could be supplied to local industry from 2017, once finding suitable investment partners and receiving State Government approvals.

Based on projected gas prices, the company claimed the Blue Gum gas project could deliver in excess of $4 billion in gross revenue over a 25 year period and could create more than $200 million in state royalties.

“This Reserve upgrade reinforces Carbon Energy’s ability to provide the Queensland market with access to a major new gas resource and comes at a time when the east coast industrial and domestic market is facing looming gas shortages,” Carbon Energy CEO Morné Engelbrecht said in the company’s announcement to the Australian Securities Exchange.

“We are planning to bring our Reserves onto the market in time to meet the forecast gas shortages towards the end of the decade.

“The constraints on the local gas market are going to hit industry particularly hard.

“We are in discussions with potential industrial off-take partners to supply them with this new source of gas.”

Carbon Energy has recently submitted a Decommissioning Report to Government detailing results of more than 2,000 water samples taken over the past six years.

The company is currently preparing a Rehabilitation Plan for its Bloodwood Creek UCG trial site.

Carbon Energy said it is hopeful of receiving a decision from the Queensland Government allowing it to proceed with the standard approvals process for the Blue Gum gas project shortly after submission of the Rehabilitation Plan.

Website: www.carbonenergy.com.au