New South Wales is Australia’s largest potential market for oil and natural gas and generates a third of the total energy demand. Exploration drilling for gas is about to begin in the Sydney Basin.
New South Wales is the only Australian state to have developed natural gas markets and a distribution system based on supplies from another state. Gas was first supplied to Sydney in 1976 via the 1,351 km Moomba (in South Australia) to Sydney gas pipeline. Since then the pipeline network has been expanded to include connections to Victoria and encompass regional areas including Wollongong, Newcastle, Dubbo, Wagga Wagga and Tamworth.
Despite the total reliance on the importation of petroleum from outside its boundaries, there have been a few significant outcomes in recent exploration in NSW, involving the delineation and development of gas fields.
However, limited exploration has demonstrated that some of the sedimentary basins in NSW have all the elements of the petroleum systems suitable for the generation of oil and gas. The disparity between levels of exploration in NSW and adjoining States is further highlighted by the fact that many of the geological formations and sedimentary basins that host economic gas and oil production in South Australia and Queensland simply extend into NSW.
In addition, petroleum exploration was focused on oil exploration rather than gas. Easy access to resources of high quality black coal, which are used for electricity generation, steel making and industrial process heat generation, discouraged exploring for gas in NSW. Currently, coal-fired power stations generate over 90% of the State’s electricity with hydro-electric facilities accounting for most of the remaining capacity.
Early perceptions were that marine rocks were required to generate oil and coal’s capacity to generate oil was not understood. As a consequence, not only is NSW sparsely explored, but the limited exploration that has been undertaken was carried out some time ago. To date, there have been less than 300 conventional petroleum wells drilled within the State despite there being almost 500,000 km2 of sedimentary basins in NSW.
There have already been numerous shows of oil and gas in most NSW sedimentary basins, with significant gas flows recorded in the Gunnedah/Surat, Sydney and Clarence-Moreton Basins. Water bores scattered throughout the Eromanga and Surat Basins expel methane and higher hydrocarbons. Commercial petroleum production, either onshore or offshore, occurs in all states except NSW.
New South Wales
NSW is Australia’s largest potential market for oil and natural gas. The 6 million residents in the State generate roughly a third of the country’s total energy demand. Total energy consumption in the State is concentrated in the industrial and transport sectors which combined consume around 80% of the total, with the remaining consumption in the domestic and commercial areas.
The NSW gas pipeline network has undergone significant expansion, bringing gas to many new regional centres. The expansion of the gas pipeline network should act as a significant stimulus to exploration in NSW.
The expanded network will provide new and larger market opportunities for gas sales. It will also provide the infrastructure needed to transport the gas found in areas of petroleum potential to the major markets, reducing the cost and risk of developing any petroleum discoveries.
Investigations have indicated that many of the artesian water bores within the Great Australian Basin (Surat and Eromanga Basins) are flowing gas to the surface, some in substantial quantities. The gas within the Surat Basin is generally dry while the gas in the Eromanga Basin tends to be wetter.
Interest was initially drawn to the coal seam methane potential of the area due to the underlying coal measures of the Gunnedah Basin. However, conventional petroleum is also being targeted, particularly within the Narrabri gas fields, which contain both conventional and coal seam methane resources. Gas discoveries have been made at Coonarah and Bohena, with Coonarah providing gas to the Wilga Park power generation plant and Bohena under production testing.
The Darling Basin contains a very thick sedimentary sequence (up to 12 km), much of which is under-explored, although available data indicate significant hydrocarbon potential. The existence
of adequately mature hydrocarbon source rocks is also evident. A number of minor hydrocarbon shows in wells have been analysed with encouraging results. The Darling Basin is a major focus of current exploration.
Following the success in USA a number of companies have shown interest in investigating the low rank coals of the Murray Basin where thick sequences of coal are known. The Murray Basin is also a major focus of exploration.
The Sydney Basin – Offshore
Exploration drilling for gas is about to begin in the Sydney Basin in an area referred to as Petroleum Exploration Permit (PEP) 11. The area covers 8,250 km2 and is estimated to hold 470 million m3 of recoverable gas. The drilling rig will be stationed about 35 km east of Newcastle.
Industry and Investment NSW