The Walloon Coal Measures resource density: how low can we go?

Abstract

Coal seam gas (CSG) production began from the Walloon Coal Measures of the Surat Basin in 2005. Initial field developments were located within a high production fairway where resource densities are >3.5 PJ/km2. The majority of the Surat Basin CSG is produced by four major consortia with tens of billions of dollars invested in infrastructure. As a result, the industry directly contributes to >30 000 jobs within Queensland and is forecast to contribute >A$5.5 billion in royalties over the next 5 years. Gas offtake is dominated by the export LNG market with a consistent daily throughput of 3–4 PJ. Gross Queensland gas production exceeded 1500 PJ in 2020 with ~80% coming from the Walloon Coal Measures. Historical breakeven wellhead gas prices in high resource density areas in the Surat Basin have been reported as <$5/GJ for undeveloped 2P Reserves with access to infrastructure. Moderate resource density CSG potential in the Surat Basin which is commonly in the shallower margins was historically considered marginal or sub-commercial if the requirement for in-situ standalone infrastructure capital expenditure is factored into economical modelling. Therefore, the potential of these developments will require stakeholder cooperation via existing infrastructure. Accounting for natural decline in current fields, available capacity at existing facilities and pipelines, and the forecast impending east coast gas supply imbalance, the landscape and economics of Queensland CSG production is predicted to transform. The paper explores the lower limit of gas rates and recoveries, on a single well basis, in shallow, moderate resource density underdeveloped areas of the Walloon Coal Measures.