19-06-08 Australia's Queensland Gas Company (QGC) expects to confirm an 80 % increase in its proved and probable (2P) coal seam gas reserves in the Surat Basin, which would boost the chances of an LNG project it is pursuing in the eastern Australian state, the company said.
The upgrade would boost reserves in its Surat Basin acreage from 1,317 petajoules to more than 2,370 PJ, said QGC. Certification is expected by June 30, after final confirmation by independent certifiers Netherland Sewell & Associates.

QGC has an 80 % share of the reserves, which amounts to more than 1,895 PJ. The other 20 % is held by UK's BG Group, which acquired the stake after a transaction signed on April 11, said QGC.
The partnership with BG includes a proposal to build a 3 mm to 4 mm tpy LNG plant at Curtis Island in the Queensland port city of Gladstone, which would be supplied with 190 PJ/year of coal seam gas from the Surat Basin. QGC has targeted a gas reserve base of 7,000 PJ of 2P reserves to supply the project.

The NSAI estimate also showed QGC's proved (1P) reserves rising from 477 PJ to more than 560 PJ, said QGC. Latest proved, probable and possible (3P) reserves are estimated at more than 7,100 PJ, more than double the previous level of 3,116 PJ, said QGC.
The latest interim reserves estimate would form part of a bidder's statement required for QGC's proposed friendly takeover of Roma Petroleum, QGC added. Roma holds a significant interest in the Surat Basin permit PL 171, which is close to QGC's ATP 651P and adjacent to its ATP 574P.

"By 30 June 2009 almost half a billion dollars will have been spent on our exploration of the Walloon Fairway, involving drill stem tests, core holes and pilot testing," QGC managing director Richard Cottee said. "This is a key step in arriving at a final investment decision in 2010 for the LNG project with our alliance partner, BG Group," Cottee added.
"Doing a lot of the hard work on reserves early has given QGC a great start with our results ahead of expectations. QGC has drilled 264 wells since November 2000, with 104 wells being drilled so far this financial year and 200 wells planned in the 2008-2009 year," he said.

The Curtis LNG project by QGC and BG is among five liquefaction plant proposals in Queensland, all to be based on coal seam gas production.
The other four are by Liquefied Natural Gas Limited at Fisherman's Landing, Canada's Impel, Australian producer Santos, and a partnership between Australian junior Sunshine Gas and Japan's Sojitz Corporation.