PETROLEUM companies have shown “good interest” in a sweeping new proposed gas mining tenement being opened up in the South East, according to Energy Minister Tom Koutsantonis.
The final bids for the 2017 Otway onshore acreage release – which will open up unprecedented land for gas mining – close today.
It is understood the new exploration blocks will cover a staggering 50,000ha across the South East, mostly around the Penola district.
While the process is still in its early stage, the government has yet to rule out companies being permitted to use hydraulic fracturing, which is commonly known as fracking.
This exploration area – not part of the world-famous Coonawarra wine district – will be the first area that will qualify for the government’s 10pc royalty sharing program.
“While there has been good interest from industry in this tenement, the final number of bids won’t be known until close of business today,” Mr Koutsantonis said this week.
The senior minister said new gas production was needed to address the energy supply shortfall.
“We have a very serious gas shortage in Australia that is driving up power prices for households and businesses across the country,” Mr Koutsantonis said.
“Unlocking more gas for supply to local markets is key to putting downward pressure on power prices, which is why we are partnering with gas companies through our Plan for Accelerating Exploration (PACE) exploration grants.
“We are also partnering with communities through our PACE royalty sharing program, which could provide significant revenue streams to farmers who have gas extracted from beneath their land.”
The government is expected to announce the winning bids, together with the details of work programs, by the end of October.
According to government-released information, they will be auctioned as one tenement of five exploration blocks.
Meanwhile, the State Government is yet to announce the successful applicants for round two of the PACE gas grants.
The deadline for these proposals was August 1.
Applicants must nominate how South Australian gas users – firstly electricity generators, followed by industry and then retail consumers – will be provided with a first right to agree to commercial terms to contract gas resulting from grant-supported projects.
