Incitec Pivot makes progress preparing to produce gas

Fertiliser and industrial chemicals manufacturer Incitec Pivot (ASX: IPL) has reported progress in an ambitious project to add to the eastern Australian domestic supply of gas.

The company, whose major input is gas which has become prohibitively costly on the east coast, reported progress on its 50-50 joint venture with Central Petroleum (ASX: CTP) at Project Range and Dukas 1.

The third well of the Project Range programme in the Suart Basin was spudded on the weekend, while mechanical issues that had held up drilling at Dukas 1 were being overcome, and further drilling is planned.

The wells 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 companies commented: “If successful, this permit will provide a new source of gas supply for the east coast domestic gas market.”

With three LNG export projects built at Gladstone, the east coast is crying out for domestic gas, which is not reliably available to manufacturers on long term, reasonably priced contracts.

The companies believe they have demonstrated their ability to successfully execute their development programme.

The exploration programme will be concluded in the third quarter of 2019.

Picture: Central Petroleum

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