"Ferrari of Shale". In a remote corner of the outback, a drilling crew will soon try tapping shale rocks that could hold more than three times the world's annual consumption of natural gas.
Origin Energy plans to drill two wells later this year in the Northern Territory's Beetaloo Basin, after the local government ended a three-year ban on fracking -- the controversial practice of extracting oil and gas from layers of shale rock deep underground.
With an estimated 500 trillion cubic feet of gas, Beetaloo has been compared to famed US shale regions such as Marcellus and Barnett.
But its isolated location six hours' drive south of Darwin, lack of infrastructure, and the likelihood of tough environmental opposition make Beetaloo a highly speculative investment.
"There are some big numbers being quoted and people have to realise this is exploration," said Mark Schubert, Origin's head of integrated gas, noting that only some of the total reserves would be extractable.
Origin's permit area is the size of Wales, but engineers on site are more likely to encounter crocodiles than sheep in the scrubby, billabong-dotted bushland.
Beetaloo is about 2,500 kilometres away from Sydney and even further from Melbourne, so the project would require pipelines that would connect to and expand the capacity of the nation's growing gas transmission network.
In 2016, before the exploration ban, Origin drilled a so-called dry gas well -- one that contains only natural gas -- that allowed it to estimate a recoverable resource of 6.6 trillion cubic feet, enough to support a gas export supply train for 20 years, according to Schubert.
Looking for liquids
The next round of drilling will focus on areas where the gas reserves could also include liquid petroleum gas and condensate -- a kind of ultra-light crude oil -- valuable byproducts that would improve the commercial viability of the project.
Data suggest the Beetaloo formation has similar characteristics to Marcellus in the eastern US, which Schubert calls "the Ferrari of shale." The new wells will test whether it shares the same "deliverability" as Marcellus.
Santos, based in Adelaide, also plans to drill for shale gas in the nearby McArthur Basin later this year and has submitted its environmental management plan to the territory's government.
Origin, and its joint venture partner Falcon Oil & Gas, have a long way to go before they will bring Beetaloo gas to market, probably around the middle of next decade.
That may be just in time to head off a domestic shortage of the fuel on the east coast, which has traditionally relied on the now-declining Bass Strait offshore field next to Victoria.
Beetaloo could also feed the growing gas export business. Australia is vying with Qatar as the world's top liquefied natural gas seller and the construction of three export terminals in Queensland in the past decade means domestic users now compete with fast-growing Asian demand. https://www.smh.com.au/business/companies/the-next-ferrari-of-shale-may-be-hiding-in-the-nt-outback-20190502-p51ja7.html