Department of State Development

17 Mar 2017 Petroleum

The recipients of the first round of PACE Gas Grants have been announced today, with five exploration and development projects to share in $24 million in State Government funding.

The grants will generate up to $174 million in new investment by oil and gas companies in local production projects.

Gas extracted through the grant scheme will be offered to South Australian electricity generators first, increasing the affordability of supply and putting downward pressure on power prices. On Tuesday the State Government announced it will run a second $24 million round of PACE Gas grants.

The State Government will also offer a new exploration licence for five blocks in the Otway Basin in the South East, through a competitive bidding process. The Minister is expected to announce the winning bidders, together with details of the work program, by late 2017. The exploration area will not include the Coonawarra wine region.

The State Government’s royalty sharing program, announced on Tuesday, will first apply to this new exploration area.

PACE Gas Results

Following a thorough assessment of the applications received for PACE Gas grants, a panel of experts, including independent advisers, recommended five successful recipients.

The five PACE Gas Grant projects comprise:

  • $5.82 million for the Senex-Santos Cooper Basin pipeline project
  • $6 million for the Beach Energy Otway Basin exploration project targeting conventional reservoirs
  • $3.96 million for the Santos Cooper Basin re-fracture stimulation project
  • $6 million for the Santos Cooper Basin underbalanced drilling project
  • $2 million for the first phase of the Strike Energy Cooper Basin deep coal project

New Exploration Tenement

The new exploration licence for the South East will be auctioned as one tenement of five exploration blocks. 

The Otway Basin consists of deep shale gas, located far underground. This type of gas can be extracted with far fewer well heads compared to coal seam gas, which is located much closer to the surface.

Royalty Sharing

On Tuesday the State Government announced a new royalty sharing program for landowners. The PACE Royalty Return program will first apply to a new exploration licence in the South East, with a competitive bidding process to be finalised by year-end.

Minister for Mineral Resources Tom Koutsantonis said gas is key to lowering power prices in South Australia.

"We are taking charge of our energy future and in South Australia that means making the most of our abundant wind, solar and gas resources," he said.

"There is enough gas in the ground in South Australia to power our grid for centuries, and this package of measures will help us extract more of that gas, boost local electricity generation and put downward pressure on prices."