BPH Energy, Bounty Oil & Gas and Commonwealth pave way to resolve impasse on critical NSW offshore gas project

Former prime minister Scott Morrison’s unprecedented move to block a vast NSW offshore gas project, PEP 11, from going ahead looks now as if it will be overturned.

The companies involved — BPH Energy (ASX: BPH) and Bounty Oil & Gas (ASX: BUY) — have filed proposed consent orders in the Federal Court of Australia to end litigation over the PEP 11 project.

If approved by the Federal Court, Mr Morrison’s move using the Commonwealth-NSW Offshore Petroleum Joint Authority to ban the project’s development will be set aside.

The then-prime minister was seen as intervening over the responsible federal minister in a bid to save critical Liberal seats on the central coast of NSW and in inner-city Sydney.

The Liberal member at the time for blue ribbon Wentworth seat, Dave Sharma, was the one who campaigned against the gas project — but lost his seat anyway.

Local MPs on the central coast, Emma McBride (Labour, Dobell) and Lucy Wicks (Liberal, Robertson) came out against the project and the federal ALP also called for PEP 11 to be shut down.

Former PM secretly appointed himself a second resources minister

The Commonwealth Minister for Resources (now Madeleine King) and Asset Energy (a wholly-owned subsidiary of BHP investee, Advent Energy) have filed proposed consent orders with the Federal Court.

The proposed orders seek to end the ongoing litigation regarding PEP 11 without the need for a trial.

BPH says the orders, if granted, will set aside the March 2022 Joint Authority decision to refuse Asset Energy’s application for variations of conditions, and also a related refusal to grant an extension of term beyond February 2021.

Asset began proceedings in June at the Federal Court last June alleging that Mr Morrison was biased and failed to afford procedural fairness in his decision to cancel the project’s permit.

Mr Morrison was later found to have appointed himself to several portfolios, including resources, without telling some of the portfolio ministers.

Significant untested gas play

BPH Energy views PEP 11 as one of the most significant untested gas plays in Australia. It is adjacent to the Sydney-Newcastle area, the largest domestic gas market in Australia.

According to BPH, the Sydney area is a major contributor to Australia’s greenhouse gas emissions. That basin region contains the largest number of carbon dioxide emission sources in Australia, including oil refineries, coke ovens and power stations.

Advent Energy with BPH Energy have been fighting back on the environmental objections, saying the partners are strong supporters of the Net Zero 2050 plan (calling for zero carbon emissions by 2050) and have already proposed carbon capture and storage (CCS), a key clean energy technology.

PEP 11 has been pursued since 1981 when the first 2D seismic survey was carried out.

That work showed the project area has similarities to the conventional gas fields of the Bowen Basin in Queensland, with a similar age and depth. The Bowen Basin fields have interbedded coal and gas sands of the Late Permian period corresponding to PEP 11.

Gas project will help Zero 2050

David Breeze, who is both chairman of Advent Energy and executive director of BPH, has defended plans to drill the Baleen prospect, located about 30km south of Newcastle.

“Advent Energy is a strong supporter of plans for Net Zero by 2050 and sees the company playing a direct role in achieving that target, especially in NSW,” he said last year.

It will do this first by finding gas close to Australia’s biggest domestic energy market and explore opportunities for CCS.

Mr Breeze said CCS could be a real “game changer” for NSW and Australia transitioning to a clean energy future.

CCS is being used in Norway and at the Gorgon project in Western Australia, with Exxon Energy last year announcing a $3 billion clean energy plan including CCS.