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Mitsubishi Corporation signs JV for gas exploration in Canning Basin

Colin Barnett image

Colin Barnett
Premier; Minister for State Development

Premier and State Development Minister Colin Barnett announced on 7th November the signing of the Natural Gas (Canning Basin Joint Venture) Agreement by the State Government and joint venture partners Buru Energy Limited and Mitsubishi Corporation. The agreement, which is for an initial term of 25 years, with a possible 25 years extension, will encourage investment in a significant exploration and evaluation program to determine the technical and economic viability of natural gas resources in Canning Basin.

Mr Barnett said there was enormous potential for natural gas in the arid 530,000sqkm Canning Basin, which stretches from the coast between Port Hedland and Broome, to the State’s eastern border. Last year, the US Energy Information Administration estimated the Canning Basin unconventional gas resources at about 229 trillion cubic feet, which is about one and a half times WA’s currently identified offshore resources.

The agreement provides additional security of tenure for 17,000sqkm (1.7 million hectares) covered by five exploration permits held by the joint venture. These permits anchor the joint venture project, with the agreement facilitating further targeted gas exploration in these permits and the development of a pipeline to transport gas south to existing industrial areas.

The State Government will also legislate to facilitate the continued exploration for natural gas in the remote Canning Basin, the development of a gas pipeline to the Pilbara, and to ensure Western Australian consumers have first use of any gas discovered. The agreement also provides for potential future gas supply for export once the Domestic Gas Project is under development.

Natural gas provides about 50 per cent of the State’s domestic electricity generation, and contributes to the production of key resource exports including iron ore, alumina, base metals and gold. Mr Barnett said: “Future development of energy-intensive magnetite production in the Pilbara and the Mid-West and other value-adding and advanced manufacturing opportunities in the State, will benefit considerably from an expansion of WA’s domestic gas supply sources.”

“If commercially viable gas resources are discovered, by mid-2016 the partners will be required to submit a plan for construction of the domestic gas project, including a pipeline connecting to the existing State gas network in the Pilbara.”