Speculation over exporting conventional gas from the Cooper Basin through Gladstone is a familiar topic of discussion in the energy industry.

However, in an interview with Energy News, Santos’ general manager of its eastern Australia gas business, Nick Lagonik, said shale-fed LNG trains were a likely development.

“If we are successful in commercialising shale here in the Cooper, it is quite likely the shale gas from here will end up both in the domestic and also the LNG export market,” he added.

“We would expect that it would end up there.

“This is a really great opportunity for the Cooper Basin. And supply onto the east coast market is growing on the back of LNG trains.

“That’s really important. It gives us the opportunity to grow an asset. Yes, if we can make it happen here, we will provide it to any customer who wants to sign up and pay the price for it.”

Speaking during a media site visit to Santos’s facilities in Moomba, Lagonik discussed the challenges facing investment and the practicalities of life in the Cooper Basin.

“The biggest challenge for investment in South Australia is the whole issue around the cost of doing business, whether it is the cost of dealing with the regulations and the environmental requirements, the cost of labour, or the cost of projects,” he said.

“If we’re successful, then it means what we have achieved will be translated to the rest of industry in South Australia and will attract investment.

Lagonik said Santos also was looking to increase carbon dioxide processing capability at the Moomba plant.

“What we are looking to do is increase the capacity of the plant, essentially by putting more CO2 processing capability into the plant,” he said.

“As we do more infill and ultimately shale development, part of the challenge for us is being able to deal with the CO2. And the processing facilities will allow us to do that.

“There are a lot of third party explorers in the Cooper Basin, and part of our plan is to have sufficient capacity to be able to look after our own production, but also provide a service to third parties if they need access to processing capacity or facilities.”

It is a fair question to consider whether Santos is looking into expanding the Moomba South Central underground gas storage facility in anticipation of the ‘shale gale’

Lagonik said the facility had sufficient capacity.

“It’s quite a large reservoir,” he said.

“The size of that facility is more than ample for what we need. The challenge is more, how can we quickly get gas in and out?

“What we need to look at is whether we need to put more pressure in there to get gas out faster.

“We don’t have any real plans to add capacity in that area, though we will continue to improve the reliability and deliverability of that facility.”

Santos has about 1200 people working in the Cooper Basin at any one time, with 824 residing in the Moomba camp.

Workers travel from as far afield as North America to work on the site, and coexisting with locals and tourists on the area’s roads continues to be an ongoing challenge for the company.

Santos, as operator of Gladstone LNG, already has locked in a supply of 750 petajoules over 15 years from the South Australian Cooper Basin Joint Venture (Santos 66.6%, Beach Energy, 20.21% and Origin Energy 13.19%) under a deal with an oil-linked pricing formula.

The contract equates to an annual volume of 50PJ, or slightly more than half of all the gas produced by the Cooper Basin in recent years. It would be enough feedstock for about 1 million tonnes per annum of LNG.