State Gas receives $5.5m boost from Queensland government for Rolleston West CSG project
State Gas (ASX: GAS) has received a major boost to its development plans for the Rolleston West coal seam gas (CSG) project with the Queensland government awarding the company a $5.5 million exploration grant.
Funded through the government’s Frontier Gas Exploration Program, State Gas intends to use the grant to further delineate gas resources and reserves at Rolleston West.
The company has already identified 279 petajoules of contingent resource gas in the project area.
Preliminary production testing of the project’s dual lateral well system in 2022 and 2023 achieved a stabilised flow rate of 474,000 cubic feet of gas per day.
State Gas is confident that when processed, the flow level will be equivalent to approximately 0.5 terajoules of pipeline-quality gas per day.
Two new wells
The company plans to use the new government funding to support the drilling of two new vertical wells, which will be located near the previously drilled Rougemont 2/3 area that has proven gas content and commercial productivity.
Executive chair Richard Cottee said the well program design will maximise the resultant reserves proven up by the earlier wells, leading to resource numbers that may be sufficient to underwrite a connection to the national pipeline grid.
“Qualifying for this exploration grant funding is a strong endorsement for the Rolleston West project and the company,” Mr Cottee said.
“It demonstrates that the Queensland government shares State Gas’ view that the area is highly prospective and capable of supporting new gas project development.”
“State Gas’ high density natural gas facility will enable it to capture and commercialise production testing gas from these wells, thereby supporting the Frontier Grant Program’s dual objectives of increasing geological knowledge of the area and accelerating new gas supply to Queensland and the East Coast domestic gas market.”
Petroleum lease
Mr Cottee said successful results from the drilling campaign will accelerate the company’s application for a petroleum lease over a substantial portion of the project area and support the ongoing evaluation of a significant CSG project in the area.
The Rolleston West permit ATP-2062 is located approximately 24km south-west of the Rolleston gas plant and 35km west of both the Queensland and Wallumbilla to Gladstone gas pipelines.
State Gas also holds a 35% interest in two other nearby permits in a joint venture with a Santos (ASX: STO) subsidiary.
These areas lie adjacent to or in the near vicinity of State Gas and Santos’ existing interests in the region.