Santos Expands Coal Seam Gas Drilling Near Narrabri, New South Wales

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Researched by Industrial Info Resources Australia (Perth, Australia)--Santos Limited (ASX:STO) (Adelaide, Australia) is awaiting government approval to increase the number of coal seam gas (coal bed methane) wells it is operating near the town of Narrabri, New South Wales. The wells are part of Santos' ongoing Dewhurst Drilling program.

Santos already is in the approval and development process for its nearby Bibblewindi Coal Seam Gas project, which has attracted strong criticism from environmental groups that fear the project will negatively impact the Pilliga Forest. Also known as the Pilliga Scrub, the forest covers approximately 1,160 square miles (3,000 square kilometres) of semi-arid woodland; it is the largest remaining continuous woodland in New South Wales.

Santos has applied for environmental approval to drill an additional two horizontal spurs at three existing vertical wells, allowing each well to increase production and target previously unreachable coal seams. The plan is for the Dewhurst 16, 17 and 18 wells to each tap into the Bohena, Namoi and Rutley coal seams that lie at 3,000 feet to 3,300 feet (950 meters to 1,000 meters) below ground level. Two new, grassroot wells also are being planned--Wells Dewhurst 30 and Dewhurst 31 will target the Maules Creek Formation.

Additional surface infrastructure will be required to meet the increased production. Two new gas flares are proposed that will operate 24/7 (except in times of high fire danger) to minimize the risk of igniting a bush fire.

Many miles of additional gas and water-gathering pipes will be required, as will upgrades to a number of existing gathering pipelines.

Water used in the process will be transported to the nearby Leewood Water Treatment Facility, which is due to commence construction soon.

Santos said that it would like to see the project proceed to help supply the New South Wales domestic gas market, which is expecting a supply shortfall from 2016, when many current supply contracts expire.

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