PERTH (Reuters) - France’s Total (TOTF.PA) has made its first move into Australian shale gas, announcing on Tuesday that it has signed a farm-in agreement with Central Petroleum (CTP.AX) for shale gas exploration permits in central Australia.
The Australian shale gas industry is in its infancy, with the first commercial gas produced earlier this year by Australia’s Santos (STO.AX).
But there are hopes in the energy industry that shale gas will eventually become part of Australia’s booming liquefied natural gas (LNG) export industry.
“With our participation in the two major LNG projects of Ichthys LNG and Gladstone LNG, Australia has become a core area for Total. I’m delighted with this deal and its potential to add large resources to our portfolio,” said Mike Sangster, managing director for Total Exploration and Production Australia.
Exploration of the four permits in the South Georgina Basin in the Queensland and Northern Territory states will begin with a $60 million investment at the first stage, which will be 80-percent funded by Total.
Total will then have the option to proceed with another joint investment of $130 million for a second and third stage of exploration.
At the end of the three exploration stages, Total will assume operating responsibilities for 90 percent of the permits’ acreage, with Central Petroleum retaining 10 percent.
Shale gas is trapped in rocks and requires a technology called hydraulic fracturing, or fracking, to unleash.
Reporting by Rebekah Kebede; Editing by Joseph Radford