Mines Minister George Cash said the exciting Chrysaor gas discovery in the offshore Carnarvon Basin on the North-West Shelf had the potential to be a catalyst for a major expansion of Australia's liquefied natural gas (LNG) industry.
Mr Cash was commenting on a report by Ampolex Limited (January 11) that the Chrysaor 1 well being drilled by West Australian Petroleum Pty Ltd (WAPET) had flowed gas at rates up to 63.5 million cubic feet per day during recent production test operations.
"It is the most significant petroleum discovery in Western Australia for some time," Mr Cash said.
"The Chrysaor gas field has potential reserves about the same size as those at North Rankin which currently produces all of Australia's LNG," he said.
"Furthermore, it lies adjacent to WAPET's giant Gorgon gas field which has probable reserves greater than those of North Rankin.
"Within the Chrysaor/Gorgon areas, the WAPET partners have a major resource, over double the size of Australia's only current LNG producer.
"Given the sheer size of this resource, a likely development scenario would be an LNG export project."
Mr Cash said Australia currently supplied about 25 per cent of Japan's LNG requirements of 40 million tonnes per year.
Market predictions beyond the year 2000 were that a significant supply shortfall was likely not only in Japan, but also in Korea and Taiwan.
As potential new capacity in the region could exceed the projected total LNG supply shortfall by over 30 million tonnes in 2005, there was a strong market-driven incentive for potential new LNG suppliers to develop their projects as early as possible.
The Minister said it was therefore important that companies, such as WAPET, proved up Australia's natural gas reserves in order to initiate new LNG projects to supply part of the Asian shortfall and establish a competitive advantage against other potential suppliers which included Indonesia, Sakhalin Island and the Middle East.
"I am sure all Western Australians will join me in congratulating the WAPET joint venturers on their discovery and will wish them well in their attempts to find a market to facilitate early development of the resource," Mr Cash said.
Media contact: Mark Thompson 222 9595