PEP11 GAS EXPLORATION PROJECT

The GAS project NSW desperately needs

Bass Strait, the mainstay of natural gas supply to NSW for the last 50 years, is fast running out!

PEP11 is considered to be a replacement for this aging field.

Pep11 Takeaway

PEP11 (Petroleum Exploration Permit 11) is a license to explore for gas issued by the Commonwealth Government. Exploration for gas under the permit is regulated by two Commonwealth Government Departments, NOPTA and NOPSEMA. The permit is located off the NSW coast but in Commonwealth Waters.

The PEP-11 permit is operated by Asset Energy P/L and Bounty Oil and Gas NL. Asset Energy is a wholly owned subsidiary of Advent Energy P/L.

The four main owners of the PEP-11 Gas project are:

• BPH Energy (ASX BPH) 30%
• MEC Resources (ASX MMR) 32%
• Bounty Oil and Gas (ASX BUY) 15%
• Grandbridge Securities Australia (private) 7.5%

All companies associated with the PEP-11 gas project are Australian owned. Australian “Mum and Dad” investors own approx. 90% of these companies. The majority of shareholders in PEP-11 companies reside in NSW.

Asset Energy has previously drilled one exploration well in the permit, offshore from Newcastle, in 2010. Although the well did not find any gas on that occasion, it was drilled safely, and with no impact on the environment.

Application Status

Where is the PEP11 Gas Project?

The proposed Seablue-1 exploration well is located 26kms out to sea off the NSW coastline from Lake Munmorah, refer location map below:

Why the PEP-11 Gas Project is Important

NSW currently does not produce any of its own gas. Historically, it has imported gas for decades from other states including South Australia, Queensland, and Victoria via pipeline. South Australia and Victoria no longer have uncontracted gas available to deliver to NSW. Most of Queensland’s gas is committed to export contracts. NSW residential and industrial gas consumers are now paying very high prices for their gas.

In particular, NSW companies that use gas as a feedstock are under extreme pressure to remain viable with high gas prices. Closures such as Qenos Port Botany were, in part, attributable to high gas prices. Other businesses are at risk of closure due to the high cost of gas in NSW which would result in the loss of jobs, particularly in manufacturing and heavy industry. NSW has also missed out on new business and job creation because of the high cost of gas. For example, the new Perdeman Urea plant was originally intended to be based in NSW. Due to uncertainty around supply, and the high cost of gas in NSW, they changed the location to Western Australia.

Gas is a key transition fuel for business achieving net zero. For example, the operators of all NSW coal fired power stations have stated publicly that they intend to close them down in the near future. To ensure power blackouts do not occur across NSW, the electricity network will rely on gas fired plants, like the planned Kurri Kurri Power Station, to cover the periods when renewable power is not available. In the month of April 2024, 67% of NSW power was generated by Black coal fired generators and just 31% from renewables. It is essential that NSW has a significant supply of gas for both domestic consumption and as feedstock for various industries.

Pep11 Fact Checker

I have heard that PEP11 will carrying out Seismic Testing/Blasting? —>Answer

FALSE.

In the Work Program set by NOPTA, a 3D Seismic Survey is required to be performed. Advent, in its Suspension, Variation, and Extension application of January 2020, has specifically requested NOPTA remove that requirement. In its advice dated 29/4/2020, NOPTA indicated it has no objection to removing the requirement to undertake 2D Seismic Testing.

I heard there will be drilling off the Northern Beaches and the NSW Central Coast? —>Answer

FALSE.

There are no plans to drill offshore from those locations. In its submission to the Future Gas Strategy, Advent has flagged the prospect of future cancellation of the Southern portion of the title (subject to NOPTA approval).

I have heard that drilling for gas is not safe? —>Answer

FALSE.

There are 100’s of offshore drills conducted annually around the world, many in other parts of Australia including Victoria and Western Australia. Incidents are extremely uncommon as they are completed very quickly and the new well is quickly secured.

I have heard that drill rigs will be an eyesore? —>Answer

FALSE.

The rig that would drill the proposed Seablue1 well will only be on location approx. 45 days. While on location, the rig will not be visible from shore as it will be 26km out to sea. Once works are completed, the rig will move off to its next job. Post drill, all future works are conducted underwater.

I have heard drilling PEP11 will ruin our beaches? —>Answer

FALSE.

As this is a gas project, oil spills are not possible. Sewerage, litter, and Coal Freighters pose real threats to beaches and marine health. References to oil spills are misleading.

I have heard that drilling PEP11 will ruin fishing and tourism? —>Answer

FALSE.

Active gas production currently occurs off Broome WA, and off the Great Ocean Road, the Bellarine Surfcoast, the Phillip Island Penguin Colony, Wilsons Promontory, and the Ninety Mile beach in Victoria. Tourism in these areas is growing. These active gas production wells also operate in conjunction with commercial and recreational fishing from places like Eden to Narooma in NSW, Port Fairy to Portland & Port Albert to Lakes Entrance in Victoria.

I have heard NSW plans to import expensive gas via Port Kembla Import Terminal? —>Answer

TRUE.

The new import terminal has very high overheads which will be passed on to consumers. The price at which PKIT could currently import gas is so high that they cannot attract any customers. Gas from the PEP11 project only needs a short 26 km pipeline to shore to the proposed Colongra Processing Plant. The plant location is right next to Jemina infrastructure which can carry the gas to NSW consumers, large and small. PEP11 gas will be the lowest cost gas available to NSW residential and commercial customers, and would help ease cost of living pressures.