The Queensland government has unveiled plans for a gas pipeline it hopes will help future-proof gas supply from the onshore Bowen basin.

The government released its Bowen Basin Pipeline concept study on Thursday, which investigated potential pipeline pathways and optimisation of the Bowen basin’s gas reserves to support Australia’s east coast domestic gas market, as well as export markets.

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According to the report, analysis carried out for the study demonstrated “a clear need for the development of additional gas production capacity” to supplement the predicted supply shortfall in the east coast market by the middle of this decade.

It found the Bowen basin was “potentially in a prime position” to meet the forecast east coast gas supply shortfall due to the level of existing infrastructure already in the basin, existing production and the exploration and appraisal activity within the basin.

“The answer to domestic gas shortages and supporting our manufacturers is more gas production here in Queensland,” said Queensland Resources Minister Scott Stewart.

“Developing the Bowen basin could do this, while also making a valuable addition to our transition to a low-carbon economy.”

Linking key regions

The study examined potential pipeline routes that could connect the Mahalo, Blackwater and Moranbah regions to the east coast gas market.

The Mahalo region has already been extensively explored and contains several projects advancing to the development stage, while Moranbah is covered by a considerable amount of data, with existing production coming from Arrow Energy’s Moranbah gas project.

The Blackwater region has the least amount of coal-seam gas production, and is considered to have the highest risk of development.

After weighing up several options, the study found that a pipeline from Moranbah to Rolleston, with a connection to Wallumbilla, supported a whole-of-basin solution to unlocking the Bowen basin’s gas resources, with the potential pipeline able to pass close to existing exploration permits across both the Mahalo and Blackwater regions.

Staged development

At a netback price of between A$7 to A$7.50 (US$5.01 to US$5.37) per gigajoule at Wallumbilla, the study found “with moderate levels of certainty” that it would be possible to produce up to 180 terajoules per day from the Mahalo region, 80 TJ per day from the Blackwater region and up to 200 TJ per day from the Moranbah region.

It added these production levels would be supported by a staged development of the pipeline, with the first phase connecting the Mahalo region to Wallumbia, with a future extension from Mahalo to Moranbah.

The report claims the staged approach will have the benefit of supplying gas into the east coast gas market with less upfront capital needed, while also providing confidence for industry to invest in the underexplored Blackwater region.

In order to take advantage of the anticipated east coast gas supply shortfall, the report notes a final investment decision on the pipeline would likely need to be taken by late 2023.

There will also need to be sufficient development of reserves through exploration to underpin the investment in the pipeline and de-risk the FID, according to the report.

Fugitive emissions

The study also investigated opportunities to capture fugitive emissions from underground and open-cut coal mines in the Bowen basin as part of the state’s effort to reduce greenhouse gas emissions 30% by 2030, while it is targeting net-zero emissions by 2050.

“Modelling in the study showed that the reduction in fugitive emissions from coal mine methane capture outweighs the potential emissions impact from CSG [coal seam gas],” Stewart said.

“This means that the pipeline would bring low-emission gas to market, and it could also reduce the emissions impact of coal mines in the area, which is a big win-win for all involved.”

The Bowen basin covers roughly 60,000 square kilometres, extending from Collinsville in Queensland’s north to beyond the New South Wales border in the south.

The North Bowen basin has been identified by the Australian federal government as a “critical basin”, along with the Beetaloo and Galilee basins, that will form part of the nation’s Strategic Gas Basins Plan.

Unlocking additional reserves across those basins is seen as a vital part of the federal government's plans for a “gas-led recovery” for Australia's economy out of the Covid-19 pandemic.