1.2.3.2.1 Metgasco West Casino Project

Metgasco has drilled gas exploration wells to evaluate both conventional (not part of the bioregional assessment) and unconventional gas resources and to test different drilling techniques in the Walloon Coal Measures and other stratigraphic units in NSW in PEL 13, PEL 16 and PEL 426, covering an area of approximately 4550 km2. In March 2013, Metgasco suspended its drilling exploration programme in the Clarence‑Moreton Basin in response to the announcement of proposed new NSW government regulations (Metgasco, 2013). In 2014, Metgasco planned to recommence its exploration programme with the drilling of the conventional Rosella‑1 well in PEL 16 to follow up the discovery of gas in deeper sands in the 2009 Kingfisher E01 exploration well.

While exploration has evaluated CSG potential throughout different parts of PEL 13, PEL 16 and PEL 426, most of Metgasco’s exploration drilling has focused on the upper Richmond Seam in areas where the thickest accumulation of Walloon Coal Measures has been observed in the Casino Trough (Figure 5 and Figure 9) around Casino. The conditions there were considered favourable due to the gas content and high gas saturation of the coal seams. The Richmond Seam also has higher permeability than some of the deeper coals. The combination of permeability and fully saturated coals results in gas flow without significant early water production relative to other CSG operations. Extraction of CSG from the Walloon Coal Measures in the Casino Trough was initially expected from depths of approximately 500 to 700 m (Metgasco, 2007b). However exploration along the western side of the Casino Trough has since demonstrated high levels of gas saturation at depths as shallow as 250 m.

Initially, trial production wells were drilled vertically into the target coal seams in an area south of Casino. However, the low flow rates of these vertical wells and reservoir modelling suggested that horizontal drilling could potentially offer a better mechanism for increasing the gas production rates. Subsequently, Metgasco drilled two horizontal trial production wells (South Casino‑9 and South Casino‑10) in 2006 to test the commercial potential of the Walloon Coal Measures with horizontal drilling techniques. South Casino‑9 was a horizontal well designed to increase the productive capacity of gas from the upper Richmond Seam of the Walloon Coal Measures drilled in an east to west direction to intersect the South Casino‑5 vertical well, while South Casino‑10 was drilled from north to south to intersect the South Casino‑8 well (Johnson et al., 2009). These early tests proved largely unsuccessful, but further lateral drilling (e.g. pilot wells Corella P11, Corella P18 and Harrier P01) demonstrated that adequate gas rates could be sustained. In any future development drilling programme it is likely that the initial wells would be lateral wells targeting the Richmond Seam from multi-well drilling pads, to minimise the surface footprint, while later wells would be vertical, enabling development of the deeper coal seams (Peter Stanmore (Metgasco), 2014, pers. comm.).

In 2012, Metgasco commenced plans to apply for a petroleum assessment lease (PAL), which would have allowed the development of up to five wells, and for a larger petroleum production lease (PPL) north-west of Casino. However, the work on this ‘West Casino Gas Project’ is currently on hold (Metgasco, 2014b). If approved, production from the project area was to be used to provide gas to: 1) Richmond Dairies and other Casino businesses; 2) a compressed natural gas project, supplying gas to industries within a 100 km range of Casino; and 3) small scale power generation in Casino. Supplying gas for the proposed new power station (‘Richmond Valley Power Station’) would involve the drilling of approximately 20 horizontal wells in coal seams and the subsequent production of gas and water to the surface (Metgasco, 2006). This project has gained full development approval, but no development has occurred yet.

In addition to the Richmond Valley Power Station, Metgasco has also proposed construction of a pipeline from Casino to Ipswich, which would feed into the existing Roma – Brisbane pipeline in Queensland (Metgasco, 2007a). This pipeline, named Lions Way pipeline, would have a length of approximately 150 km with an intended capacity of 27 PJ per year (Geoscience Australia and BREE, 2012; Metgasco, 2014a). No environmental impact statement (EIS) has been submitted for this project yet.

The water management plan for Metgasco’s 2012 to 2014 exploration programme (Metgasco, 2012) outlines, among other aspects, produced water volumes, water treatment and water monitoring (discussed in detail in later bioregional assessment products).

In September 2014, Metgasco has announced that its gas reserves and resources have been downgraded from those reported in 2013, with all reserves moved to the resource category (Metgasco, 2014c).

If CSG development proceeds, it will initially likely focus on specific areas west and north-west of Casino which have been identified as the most prospective exploration areas. However, it is currently difficult to predict the number of wells that will be drilled due to many factors related to, for example, regulations and contracted volumes.

Last updated:
3 August 2016