QPM’s $3m trial program grant could boost Moranbah gas production

QPM receives $3m grant to fund trial program of new wells targeting the FCCM
Trail will test a new pre-draining technique with new wells drilled into the FCCM ahead of longwall coal mining
Project expected to capture produced methane gas that would otherwise be flared or vented

Special Report: Queensland Pacific Metals has received a $3m grant from the Queensland state government to help fund a trial program of new gas wells targeting the Fort Cooper Coal Measures.

The Fort Cooper Coal Measures (FCCM), which include the Fairhill seam, on the western flank of the Northern Bowen Basin, sit above coal seams that will be mined using longwall techniques and is noted for its high gas content.

It is also noted for its thickness relative to other seams – ranging between 50m and 150m compared with 2-8m for seams currently subject to mining.

Despite this, the FCCM is not currently subject to gas drainage activities and is not currently included in the Moranbah project’s current proved and probable (2P) gas reserves of 331 petajoules.

Queensland Pacific Metals’ (ASX:QPM) project comprises the trialling of a new pre-draining technique involving drilling a series of wells into the FCCM in advance of longwall mining.

As the longwall continuous mining systems move through the targeted coal seams below the area where these wells are drilled and the overlying stratigraphy collapses, the gas is liberated.

Rather than migrating down to the mining void where it would be extracted through goaf gas drainage (where it is flared) or vented, the methane will be captured and taken to surface for extraction from the wells.

Increased gas production

The $3m Frontier Gas Exploration Grant under the Queensland Department of Resources’ Resources Industry Development Plan will fund the FCCM production assessment on QPM’s petroleum leases that overlie existing mining leases.

These will be released on a staged basis as project milestones are met over the 2024/25 financial year.

“The grant will provide the funds to complete a new drilling technique which has the opportunity of not only increasing gas production from the Moranbah project but will also result in a significant reduction in carbon emissions from the Bowen Basin,” chief executive officer David Wrench said.

“If successful, it can result in increased economic gas resources which can be incorporated into QPM’s long term field development plan.”

Success will also mean that what was previously a waste product would be a commercially viable resource, which could change the approach to gas extraction in coal mining by turning a safety and emissions issue into an economic asset.

Capturing the gas prior to its migration to mining areas will also directly reduce carbon emissions.

Additionally, gas produced by the FCCM project will be captured by the company’s existing gathering system and used for electricity generation and other beneficial purposes, delivering an immediate increase in gas production from the Moranbah project.

Meeting Australia’s gas needs

The award also comes after the Australian federal government unveiled its medium to long term Future Gas Strategy that seeks to secure affordable gas for the country as it progresses towards a more renewable grid.

Specifically, the strategy calls for the development of new gas sources and flags that steps will be taken to encourage more timely development.

While the FCCM project likely does not require further permitting being part of the existing Moranbah project, the strategy could make future development of other similar projects a lot easier.

This article was developed in collaboration with Queensland Pacific Metals, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.