Tamboran Resources has signed four non-binding letters of intent (LOIs) with four different companies for the potential purchase of a combined 510 terajoules (TJ) to 750 TJ of gas per day.
Tamboran signed separate LOIs with Origin, AGL, EnergyAustralia, and Shell Energy Australia for gas from Tamboran’s low-reservoir-carbon-dioxide Beetaloo Basin gas assets for a period of up to 10 to 15 years, the company said in a news release Wednesday.
Tamboran said it plans to separately work with the companies to eventually close binding fully termed gas sales agreements (GSAs), which include purchase prices, transportation arrangements, and other key commercial terms.
First gas production from Tamboran’s Beetaloo Basin assets is expected in 2028, subject to commercial flow rates from the assets, the company said in the release.
“The initial interest from key East Coast gas buyers for the long-term purchase of Tamboran’s low-reservoir CO2 Beetaloo Basin gas volumes demonstrates gas’ viability and role in the energy transition in Australia”, Tamboran Managing Director and CEO Joel Riddle said. “We are excited to be working with these important gas and energy retailers who are expected to provide key offtake agreements which we expect will support the progress of APA’s proposed Beetaloo to East Coast Gas Pipeline.”
“Tamboran plans to work closely with the Northern Territory, Australian Federal Government, APA Group, and potential gas purchasers to progress development of this important piece of future Australian infrastructure. With AEMO [Australian Energy Market Operator] and the ACCC [Australian Competition and Consumer Commission] forecasting a potential domestic gas shortfall of ~500 TJ per day by 2030, volumes from the Beetaloo Basin could be a key solution to meeting this forecast demand”, Riddle said.
“Tamboran is committed to developing a gas project with Net Zero Scope 1 and 2 equity emissions from first commercial production to provide energy security to Australia’s Northern Territory and East Coast gas markets”, Riddle added.
According to the news release, the APA Group, which is working with Tamboran for pipeline development, has begun preliminary land access approvals and pre-engineering studies for connecting the Beetaloo Basin to the existing East Coast Gas Grid.
Start of SS1H Drilling
In a separate news release, Tamboran said it has successfully started drilling the Shenandoah South 1H (SS1H) well with Helmerich & Payne Inc.’s, super-spec FlexRig Flex rig, which arrived in May.
Drilling activity in SS1H is expected to take around 45 days, including a pilot hole and a 3,280.8-foot (1,000-meter) horizontal section. Tamboran plans to start the stimulation program in the fourth quarter of 2023.
Upon completion of the SS1H flow testing, Tamboran and Daly Waters Energy LP will complete the farm-in requirements to earn 77.5 percent interest and operatorship of the EP 76, 98, and 117 permits. Tamboran and Daly Waters will hold a 38.75 percent interest each, while Falcon Oil and Gas Australia Limited will hold 22.5 percent, according to the news release.
Tamboran said that success at the SS1H well location could support a pilot development investment decision that includes the use of the Clean Energy Fuels Australia facilities and the APA Group pipeline to the Amadeus Gas Pipeline (AGP). Tamboran is targeting the first domestic gas sales from the pilot development by the end of 2025.
“We have recommenced our FY24 drilling activities with the Shenandoah South 1H well in EP 117. This location has been identified by Tamboran as the most likely region to replicate the successful flow results delivered from the Tanumbirini 2H and 3H wells in the EP 161 acreage, where Tamboran has a 25 percent working interest”, Riddle said.
“The SS1H well is key to progressing our proposed pilot development from the location adjacent to the AGP, where the joint venture is targeting first gas by the end of 2025”, Riddle noted.
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