Shell, BP line up to buy NT shale gas as fracking gets green light

Global energy majors BP and Shell are considering buying shale gas from the Northern Territory’s environmentally and culturally sensitive Beetaloo Basin within the next decade if an ambitious new gas export project goes ahead.

Tamboran Resources, an ASX-listed junior gas developer, said on Friday that it had signed non-binding initial agreements with BP and Shell over the potential purchase of liquefied natural gas (LNG) from its proposed production project at Middle Arm. Tamboran owns assets in the Beetaloo Basin, believed to be one of the world’s biggest untapped gas reserves, and is preparing to begin drilling works as soon as next month.

“BP and Shell are two of the world’s largest LNG portfolio trading and energy companies and provide important and credible counterparties for Tamboran to progress financing discussions to support the sanctioning of the NTLNG project, capable of producing up to 6.6 million tonnes per annum,” Tamboran chief executive Joel Riddle said.

Tamboran is aiming for first gas from the Beetaloo Basin from as early as 2025, and a potential LNG export plant from 2030.

The memoranda of understanding come after the NT government this year cleared the way for companies to resume fracking, a process involving injecting high-pressure fluid into bedrock to force the extraction of gas, after a moratorium was lifted five years ago.

The move to develop what could be a vast new gas production sub-basin has been welcomed by the oil and gas sector, which says extra volumes of the fossil fuel will provide a lucrative economic opportunity for the nation and help shore up east-coast energy security later this decade, when the Australian Energy Market Operator (AEMO) is bracing for an increased threat of domestic shortfalls.

Loading

However, fracking plans in the region have met a wave of opposition from environmentalists who fear it will drive up Australia’s carbon footprint and add to the worsening climate crisis. Some traditional owners have also objected to fracking in the region amid concerns about its impacts on their ancestral waters and lands.

In May, a coalition of 96 leading Australian scientists, co-ordinated by the Australia Institute think tank, published an open letter in national newspapers warning of the climate damage it could inflict.