LNG

Australian natural gas explorer Elixir Energy has given a positive update on expanding activities in Queensland’s onshore Bowen Basin, which supplies feed gas for LNG plants and could potentially help avert a security of supply crisis on the East Coast.

Australian coal-seam gas explorer Elixir Energy, the developer of CSG projects in Queensland and Mongolia and whose executive officers are industry veterans, has issued warnings about energy security in Australia.

Australian coal-seam gas explorer Elixir Energy has issued a quarterly activities report outlining progress on CSG projects in Queensland and Mongolia.

Several Australian exploration and production companies have signalled an imminent East Coast natural gas supply crunch while the approach of the Southern Hemisphere winter in June has already brought heavy rains and disrupted gas operations amid warnings that there was not enough new feed-gas developments for the three LNG export plants in Queensland.

Elixir Energy, the Australian exploration and production company with coal-seam gas interests in the Gobi Basin of Mongolia, is also making progress with asset development in the Australian state of Queensland where it is hoping to discover sufficient CSG for liquefaction and export.

Australian company Elixir Energy is proceeding with appraisal drilling at the Grandis Gas Project in Queensland, located close to the Wallumbilla gas hub and main infrastructure connections to liquefied natural gas export plants and also gave an update on its coal-seam gas exploration in Mongolia.

Elixir has said that government agencies such as the Australian Competition and Consumer Commission (ACCC) and the Australian Energy Market Operator (AEMO) had recently noted a rapidly emerging shortfall between gas demand and supply on the East Coast.

“The new policy does not change demand - but arguably does reduce supply options,” said Elixir, which is listed on the Australian Securities Exchange.

“Advantaged projects such as Grandis are, therefore, placed in an even stronger competitive position,” said the company.

Elixir’s Managing Director Neil Young said he was confident that the Grandis Gas Project has underlying advantages already in place.

Low-risk play

“We've picked up here a very low-risk play in terms of drilling an appraisal well in a location that is advantaged now from a global gas market perspective,” said Young whose company owns 100 percent of the licence.

“The Queensland well can be the most impactful well the company has drilled in this nearly 20 years of being listed on the ASX,” Young added.

“In the location we can access international LNG prices too. A stimulation programme which will follow early in the New Year and then that will take a month or so and then we'll get flows at the end of that,” added Young.

He said that there would be further news coming through as the company passed various stages in the drilling campaign and conducted other activities lasting into the New Year of 2024 because of the depth of the well.

“In Queensland it's going to take a while to get down to the depths,” Young explained.

BG-Shell activities

“This is an appraisal well near where BG Group, later Shell, drilled and spent a few A$100 million about 10 years ago and most of the data from that programme became public as is the case in countries like Australia and we use that data in the proximity to our permits,” he said.

“The contingent resource will actually be near infrastructure and the assets are located about 50 kilometres from what's called the Wallumbilla gas hub, which is both a physical and a market-based trading hub and connects this asset potentially to markets across Queensland and also to Australia’s southeast states of Victoria and NSW,” he added.

“There are also a number of pipelines going Northeast to the LNG plants in the Port of Gladstone which can currently supply East Asian markets but which have declining resources of their own from their foundation assets so there's a wealth of optionality here to target some domestic markets across Australia and also international markets,” Young said.

Young went on to acknowledge that the Nomgon coal-bed methane (CBM) project in the South Gobi Basin of Mongolia had not yielded expected results in terms of flow rates, though the drilling campaign was continuing with new operations.

“The Big Slope-7 appraisal well spudded just over a week ago and has already intersected gaseous coal,” said Young on Elixir’s 100 percent-owned Nomgon IX project.

“The well is now undergoing Injectivity Fall Off Testing (IFOT) to measure permeability in this upper coal section. Big Slope 7 is situated west of the Big Slope-4 well drilled in 2022 and has a planned total depth (TD) of 800 metres,” Young explained.

Mongolia contractor

The well is being drilled by the Mongolian contractor Erdene Drilling LLC and is the first of a number of wells Erdene is contracted to Elixir for drilling in the region.

Elixir added that exploration was also progressing at Bluebill-1. That well has intersected gaseous coal and drilling was ongoing.

“It is a pleasure this year to be working with Erdene Drilling again - they were pioneer drilling contractors with us from 2019 to 2021 - but took a break from CBM work for a year after that,” said Young.

“We look forward to the results of the appraisal drilling program over the coming months. Drilling results from both wells underway are encouraging - and if successful could open up significant new areas to the East and West of Nomgon,” he added.

“Last month Elixir also engaged the services of the THREE60 Energy Group to assist with the production management of the pilot and to boost the company’s drilling support,” Young concluded.

Elixir Energy Ltd, the Australian-listed exploration and production company, said it aimed to demonstrate early in the New Year a commercial flow-rate from its pilot Nomgon coalbed methane (CBM) project located in the south of Mongolia near the Chinese border.

Australian company Elixir Energy, whose main asset is its 100 percent-owned Nomgon IX coal-seam gas production sharing contract in the South Gobi region of Mongolia with possibilities for LNG production for fuel or pipeline supplies for power, has updated its operational plans.

Elixir Energy, the Australian exploration and production company with plans for a small-scale liquefaction plant using coal-seam gas to provide clean fuel for trucks in Mongolia, is making progress in its South Gobi Desert operations with prospective resources having almost doubled to 14.6 trillion cubic feet.

Elixir Energy, the Australian exploration and production company with plans for a small-scale liquefaction plant using coal-seam gas to provide clean fuel for trucks in Mongolia, is making progress in assessing resources in the South Gobi desert region.