Black Mountain expects to be allowed to export gas from its Kimberley acreage despite the McGowan Government banning such sales less than four months ago to ensure WA “can continue to access reliable and affordable gas.”
Black Mountain Exploration director Ashley Zumwalt-Forbes said the US company had worked with Premier Mark McGowan and the Department of Jobs, Tourism, Science and Innovation to have the ban lifted since its imposition in August.
“Feedback has been positive, based on the number of benefits for WA and the traditional owners living on Noonkanbah Station that stem from development of Valhalla,” Zumwalt-Forbes said.
To date, only the Waitsia field in the Perth Basin is exempt from the ban that applies to gas going to other states and territories as well as international sales.
Waitsia’s owners Beach Energy and Mitsui want to export gas via spare capacity in the North West Shelf LNG plant. The exemption granted to Waitsia was controversial as the Premier has been criticised for being too accommodating to the interests of significant Beach Energy shareholder Kerry Stokes who controls the Seven Network and The West Australian newspaper.
Black Mountain expects the ban to be lifted imminently, according to a company presentation.
Environs Kimberley director Martin Pritchard said if the McGowan Government exempts Black Mountain from its ban on the export of onshore gas so soon after it was implemented: “then this would signal the policy is effectively dead and buried.”
Pritchard said his group was highly sceptical of Black Mountain’s plans.
“Valhalla is in the National Heritage listed Fitzroy River catchment, we don’t want any risk to the river from fracking,” Pritchard.
“Fracking is not compatible with the world-renowned Kimberley environment and landscapes.”
Previous owner Mitsubishi drilled the Valhalla gas prospect on permit EP371i in 2015. Three wells were drilled, and 11 zones fracked, all of which flowed gas according to a Black Mountain presentation.
The company said its acreage of more than 7700 km2 has 2.9 trillion cubic feet of discovered gas resources with the potential for significantly more from further exploration.
Black Mountain plans to drill six appraisal wells in 2024 and have 30 wells drilled by 2026 to produce more than 200 terajoules a day of gas in 2027. Long term growth plans stretch to 900 TJ/day of gas.
Zumwalt-Forbes said Black Mountain planned to initially use a mini LNG plant to allow gas to be sold from the remote Kimberley site and would later build a pipeline.
Two possible pipeline routes are south to gain access to the international market through the NWS LNG plant or east to enter the eastern states gas market. Black Mountain would only say that negotiations are progressing well, but Zumwalt-Forbes comments on market prospects indicate the gas may go east:
“Australia is short natural gas,” Zumwalt-Forbes said.
“We have the right resource of scale and the right experienced team to deliver affordable natural gas to the nation.”
New fracking approvals delay drilling
Last week the environmental assessment of the drilling program by the WA Environmental Protection Authority was terminated by the WA Government with the agreement of Black Mountains subsidiary Bennet Resources.
Zumwalt-Forbes said Black Mountain was the first company to refer a fracking project to the WA EPA since the McGowan Government lifted its ban over most of the State in late 2018 and was treading on uncharted ground.
“We now know that the EPA will require two years of baseline studies prior to starting our project, taking us to 2024 before drilling can commence,” Zumwalt-Forbes said.
“We elected to pull down the existing referral in order to revise and re-submit a more robust referral that will set us up better for an economic development.”
Net-zero emissions gas, to a point
When Black Mountain goes back to the EPA its submission will include a claim of “Net-Zero Natural Gas” that it has placed a trademark on.
The company plans to offset all greenhouse gas emissions produced from its operations in the Canning Basin, including the relatively low two per cent CO2 content in the reservoir and emissions from excess gas that must be burnt, or flared, at times for operational reasons.
The net-zero plan does not cover emissions beyond Black Mountain’s operations, such as pipeline compressors and most significantly from end-users burning the gas for power and heat.
“We will be responsible for the emissions from our part of the value chain,” Zumwalt-Forbes said.
Environs Kimberley’s Pritchard said if Australia is to meet its Paris Agreement emissions cuts targets, it cannot open new fossil fuel provinces.
“Net-zero actually means leaving the gas in the ground,” Pritchard said.
“Furthermore, if the emissions of CO2 when burnt by the end customer aren’t taken into account, then it’s really a big furphy.”
“We’d like to know what levels of fugitive methane emissions are assumed in this ‘net zero’ promise – methane being 30-80 times worse as a greenhouse gas than CO2.”
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Main image: Valhalla being fracked in 2015. Source: Environs Kimberley