Resources minister Francis Logan has announced the release of the first 'tight gas' acreage block, a source which could power Western Australia's entire domestic gas demand for more than a year.
'Tight gas' is found in rocks with a low permeability, making it hard to extract and requiring specialised drilling techniques. Substantial 'tight gas' reserves are known to exist in the South-West and Lower Mid-West, but were previously thought to be economically unviable.
Mr Logan said the release of the West Erregulla block, located east of Dongara in the Dandaragan Trough, was great news for WA.
The Minister said West Erregulla was believed to contain more than 11 billion cubic metres of gas - enough gas to power WA's entire domestic gas demand for more than one year.
"This tight gas prospect has attracted interest in recent times, particularly with profitable gas prices and a predicted domestic gas shortage," he said.
"If the successful bidder discovers there is enough gas for commercial rates and it goes smoothly through all approvals, it is possible that gas could be supplied to the domestic market within two to five years.
"This is positive for WA, with the expected shortage of domestic gas between 2008 and 2014."
Mr Logan said the WA Government was encouraging more exploration and development in order to avert a domestic gas shortage.
It was expected that supply of domestic gas from large liquefied natural gas projects would begin after 2014, thanks to the State's domestic gas reservation policy.
"While Australia's petroleum industry does not have a lot of known expertise in the 'tight gas' field, it is more common in other regions," the Minister said.
"We are fortunate in WA to have large reserves of easy-to-access gas, so our 'tight gas' resources have been largely ignored. But with the market doing so well and the looming domestic gas shortage, 'tight gas' is looking more favourable."
Bids for the West Erregulla application area close on January 31, 2008.
