Fertiliser and industrial chemicals manufacturer Incitec Pivot (ASX: IPL) will be able to produce significantly greater quantities of gas, destined for the domestic market, from its 50/50 joint venture in Queensland.
The company has been working with Central Petroleum (ASX: CTP) to develop coal seam gas opportunities at Project Range in the Suart Basin and Dukas 1.
Central Petroleum reported that Sewell & Associates had independently certified 270 Pjs of 2C resources at Project Range, well above earlier estimates of 150-180 Pjs.
The company said: “The original estimates were based on recovery from the shallower Juandah coals.
“”The recent exploration results demonstrate that…the deeper Tarcom coals…are expected to make a material contribution to production.”
Like all east coast manufacturers, Incitec Pivot has seen gas prices triple since 2014, and set it on a course of developing its own resources to add to the eastern Australian domestic supply of gas.
The companies have been drilling wells that seek to exploit the CSG potential of the highly prospective Walloons coals structures.
Incitec Pivot is providing up to $20 million of the exploration and appraisal costs.
The development of the 2C resources is dependent on the finalisation of development plans, marketing terms and the building of infrastructure, according to Central Petroleum.
The two companies are now selecting a site for a pilot plant to demonstrate gas flows to the surface.
Picture: Central Petroleum
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