No rush for Arrow Energy expansion

A map of PEL 445.

The development of further coal seam gas projects in the Northern Rivers is likely to be “years away” according to Arrow Energy’s vice president of exploration, Tony Knight.

Arrow hold the rights to PEL 445 (Petroleum Energy Licence), which takes in several thousand square kilometres from Byron Bay to Woodenbong, and in the past year they have sunk 15 exploration wells in the region (see map).

But Mr Knight said the company’s focus would remain in Queensland in the Surat Basin (around Dalby) and in the Bowen Basin (around Moranbah) where the gas is easier to get out of the ground.

“We are still in the early stages of exploration (of PEL 445)...We are trying to target where the coal and gas occurs in the Clarence-Moreton Basin and where it is favourable to getting it out of the ground. There is coal throughout the basin, but it is a complex area with volcanic intrusions... So we haven’t narrowed down our search yet and are looking for the sweet spots, where there is good thick coal with a permeability that lets the gas out,” he said.

Mr Knight said volcanic activity had made the geology of the Clarence-Moreton Basin “more challenging” in extracting the gas than either the Surat or Bowen basins, which is why they were more focussed there.

“(The Northern Rivers is) not an area we are rushing into,” he said. “Everywhere we drill we find coal. That’s not a surprise. The issue is, is one area better than another? That’s the phase we’re in now. We are drilling at very wide spacings and it will take years to do that.”

There are no definite plans as to what would happen to any gas extracted from the region, although Mr Knight said it would need to be a big project to justify building a pipeline to Brisbane.

“We haven’t proven there is enough of a resource yet to justify that. Maybe it would be a smaller, more local project. NSW has a need for electricity, so something with power generation in mind, but that is years away from where we are now.”

When asked whether the Arrow Energy wells would use the controversial practice of fracking (where water, sand and chemicals are pumped into the ground at high pressure to fracture rocks to release the gas), Mr Knight said it depends on where the gas is.

“It’s a bit early to tell (whether they would need to use fracking here), but my suspicion is yes, based on the evidence. Fracking probably is the technique required, but we need to do more work on the properties of the coal to confirm that... Obviously I’m aware of the concerns about fracking, but a lot of those concerns come from the US, where they use fluids that contain BTEX compounds (benzene, toluene, ethylbenzene, and xylene). We don’t use those compounds... We use acetic acid, which is essentially vinegar and sodium hypochlorite, which is used for pool chlorine. When it is brought back to the surface it is stored in dams that have been specifically built and it breaks down.”