WA mines boss sees big shale potential

WA's untapped shale gas resources could be a huge prize for major companies looking to exploit the region.

The Director General of WA Mines and Petroleum Richard Sellers says WA's shale and tight gas reserves were much bigger than those in other states such as South Australia.

"The potential is way more, multiples more," Mr Sellers said in a briefing.

"The prize in the Canning Basin is huge."

He said the Canning Basin in north WA could be a game changer for the State as it was among the five biggest shale gas reserves in the world.

Last month, the State Government introduced a bill ratifying an agreement with joint venture partners Buru Energy and Mitsubishi, to allow the companies to continue gas exploration in the onshore Canning Basin, develop a gas pipeline to the Pilbara and give first dibs for any gas discovered to the domestic market.

The 530,000 square km Canning Basin - stretching from the coast between Port Hedland and Broome to WA's eastern border - is estimated to hold about 229 trillion cubic feet of unconventional gas resources, or about one and a half times the State's currently identified offshore gas resources.

Premier Colin Barnett has been increasingly bullish about shale gas after Woodside Petroleum shelved a plan to process Browse Basin gas onshore at James Price Point.

But critics point to a lack of infrastructure in the Canning Basin, remoteness and potentially high costs to remove and market the gas.

While major oil and gas players are looking at the potential of the Canning Basin, commercial production would take at least five to 10 years once successful exploration results had been achieved.

"You wouldn't have (multinationals) Conoco Phillips, you wouldn't have Hess, you wouldn't have Mitsubishi in there if they didn't think there was real potential," Mr Sellers said.

Australian Oil and gas player Santos began exploiting shale gas in the Cooper Basin in South Australia late last year, almost a decade after starting its unconventional gas program.

So far in the Canning Basin there is only one drilling rig capable of drilling to the required depths for shale and tight gas.

Each well costs about $15 to $20 million to drill and then around $10 million to do hydraulic fracturing, or fracking as it is called.

Mitsubishi has committed about $60 million to exploration with Buru Energy.

ConocoPhillips is looking to spend more than $120 million on seismic testing in the south east corner of the basin.

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