Thirty-five kilometres east of the Stuart Highway and about 70 kilometres south-east of Daly Waters as the cocky flies, stands Origin’s Kyalla 117 gas well.
It’s in the heart of the Northern Territory’s Beetaloo Basin, the first of five such geological areas of strategic significance, identified by the Federal Government as having the potential to drive investment and deliver benefits not only for the Top End, but for the nation’s economic recovery from a post covid-19 world.
Origin’s Kyalla exploration well is also a story of firsts.
It was the first well drilled as part of gas exploration activity resuming after the detailed 15-month independent Scientific Inquiry into Hydraulic Fracturing in the Northern Territory, which found the risks identified with fracking could be mitigated, reduced to an acceptable level and, in some cases, eliminated.
And it’s the first exploration well drilled, almost two kilometres deep then horizontally for another kilometre and a half, along the prospective shale rock formation of the same name.
The objective is to flow what’s known in the industry as liquids rich gas – not oil, but gas that contains valuable and highly-prized percentages of higher-order hydrocarbon molecules that can be used in the manufacturing of plastics, building products and fertilisers; gas underground that turns to liquid form at surface that we recognise as bottled LPG products; and light condensates that are blended with specialised fuel products.
In January this year, the energy company confirmed the discovery of gas containing these liquids rich molecules, following the safe and successful fracture stimulation of the well in late 2020.
Tracey Boyes, Origin’s General Manager for Beetaloo and Growth Assets, is quick to point out that being the first to do something also brings with it a level of attention not usually associated with remote resource exploration – but it’s something that the energy company has grown accustomed to with Kyalla and its broader Beetaloo exploration activities.
“There have been many eyes on this well from the outset – recognising that we’re the first explorer to drill into this 1.3-billion-year-old underground formation and watching as we’ve worked incredibly hard gaining the knowledge and understanding of how to make the gas flow and reach this latest milestone,” she says.
Tracey explains how nitrogen, a safe inert gas, was introduced into the well over the Christmas-New Year period to help lift the water pumped down during the fracking process, allowing it to flow back so that the gas in the deep underground formation could breakthrough and come to surface.
This nitrogen lift technique worked, and the well was able to produce without assistance for around a day – enough time to gather the initial data to lodge the discovery with the Northern Territory Government and announce the news.
The preliminary production data gathered pointed to unassisted gas flow rates ranging from 0.4-0.6 million standard cubic feet per day, which can also be expressed as between 0.6-0.9 terajoules a day of energy.
Perhaps even more promising was the composition of the gas – 65 percent methane, 19 percent ethane, 11 percent propane and butane, and 3 percent condensates. CO2 levels were less than 1 percent. The lower the CO2 present the cleaner the gas from an environmental, social and governance perspective.
While measured in her assessment, Tracey says the initial results, based on this early data, are encouraging.
“The composition of the gas at Kyalla gives us the strongest indication yet that there’s a valuable liquids rich gas play here.
“While it’s early days, at first glance what we’re looking at compares favourably against some of the major US shale plays, such as the Eagle Ford shales in Texas and the Marcellus further north in terms of gas composition and yields, with the added bonus of lower CO2.
“This project has legs and the discovery helps us build momentum towards realising the resource potential we think is there.
“It’s something we couldn’t have achieved without the support and the capability of many Territory-based businesses and suppliers now working with us.
“Maximising these opportunities is so important because what really defines successful projects, what really drives benefits for families and communities, what really drives healthy economies, is jobs.
“Our future story has to be a shared one about the boost created from responsible development and the construction of related infrastructure, creating additional direct and indirect benefits for those working on and supplying materials and services to projects such as ours.”
Origin’s relationship with Native Title holders is central to how the company operates in the Beetaloo.
“During fracking operations, we had the privilege to host senior family members on-site, and they were able to see and inspect all the equipment up close, as well as spend time with our experienced, technical specialists to talk about how the process is safely undertaken – and, importantly, how their land and water is protected,” says Tracey.
Longer-term measures will now be put in place at Kyalla to enable the well to flow without assistance so that extended production testing can commence during the dry season, with results expected towards the end of the year.
“Looking ahead, we’re also planning to drill a new vertical well, also targeting liquids rich gas, into a second shale formation called the Velkerri later this year,” Tracey says.
“What we’re learning at Kyalla is playing a big part in informing and refining our ongoing exploration program across the Beetaloo.”