REGIONAL Development Australia Limestone Coast is hopeful Beach Energy’s operations near Penola will help secure affordable and ongoing gas supplies for Kimberley Clark Australia’s Millicent Mill.
RDALC released a statement this week backing efforts by the State Government and industry to explore for gas in the region to “ensure the lights stay on for businesses in the region and across the state”.
After touring the Beach Energy drilling site south of Penola recently, board members said they were hopeful cost-competitive gas supplies would be made available for South East industry as drilling enters its second month at Haselgrove-3.
While the well will be almost 1000 metres deeper than previous gas wells in the region, project leader and senior drilling engineer Melanie Mackie gave assurance the well would not target formations requiring fracture stimulation.
Based on seismic testing, the drilling of Haselgrove-3 has been given a one in three chance of commercial success.
RDALC acting chair Alan Richardson said regional optimism is high the estimated $12-15m project will pay dividends, with some of the Limestone Coast’s largest manufacturers reliant on natural gas for their day to day operations.
“Several major energy users in this region are now critically dependent on a reliable and affordable supply of gas,” he said.
“Hopefully this well will help to secure those supplies, creating greater certainty for investment and local jobs as the region transitions to a future dominated by renewable energy sources.”
Kimberly-Clark Australia’s Millicent Mill currently uses natural gas transported to the region via pipeline from Port Campbell, Victoria, by the SEA Gas pipeline, which is connected to the South East Pipeline System (SEPS).
The manufacturing giant has already expressed an interest in any gas that may become available through Beach Energy’s Haselgrove-3 project as long as the supply costs are competitive.
The Union Dairy Company located at the former SAFRIES factory near Penola is another prospective user, but RDALC expressed concerns Limestone Coast industry could miss out altogether in the face of looming national shortages of domestic supply.
“Drilling of Haselgrove-3 is being supported by the South Australian Government through the Plan for Accelerating Exploration grant scheme and under the terms of the $6m grant any commercial discoveries of gas will be offered to electricity generators in South Australia before industry,” Mr Richardson said.
“We acknowledge there is a tightening national energy market, but we would like to see users in this region at the top of the list for access to local gas when it comes to determining allocations and commercial agreements.”
Gas production was suspended in the Limestone Coast in 2013 due to reservoir depletion and Beach Energy said any gas produced from Haselgrove-3 would be transported via the existing pipeline network linked to the Katnook gas processing facility.
By mid October, the Haselgrove-3 well had reached almost 3300 metres of its total vertical depth target of approximately 4000 metres.
