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Cornelius Johnston, master of the gas transport ship North West Eagle overlooks the first shipment of LNG (Liquefied Natural Gas) to depart from the Pilbara region of Western Australia for China May 17, 2006. Reuters/Kerry Edwards

Beetaloo Basin in Australia’s Northern Territory is in the gaze of global investors who see it as Australia's answer to the US shale boom. Top investors who made billions in the US shale and Queensland coal boom are vouching for the strong market potential of the relatively unknown Beetaloo basin.

Eyeing the project are American Energy Partners (AEP) led by US shale pioneer Aubrey McClendon, and Texas-based private equity investor Energy & Minerals Group. In the past few months, they have been active in working out the costs, infrastructure, estimates on pipelines and LNG plants for delivering the potential gas to buyers, reports The Sydney Morning Herald.

Beetaloo has a combination of factors working in its favour. They include geology and multiple routes to customers, huge international LNG market, local mines and a big number of customers in southeast Australia.

“I don't think there's anywhere else in the world where you can have that sort of optionality,” said Joel Riddle, chief executive of Tamboran Resources, which drilled a well in the Beetaloo basin with Santos in 2015.

NT in focus

In a recent presentation to investors, AEP's new global arm led by McClendon said NT is in its immediate focus as the US shale sector was too "picked over" and "stuck-in-the-mud" of low gas prices.

NT Mines and Energy acting chief executive Ian Scrimgeour called the Beetaloo sub-basin as “the most advanced and prospective shale gas play” in the region.

“It is too early to form expectations on whether or not commercial gas will flow from the Beetaloo, however, there is increasing confidence that the gas in place within the entire sub-basin is in the order of hundreds of trillion cubic feet, and future work will need to focus on determining how much of that gas is commercially recoverable," he said.

Market opportunity

According to American Energy Global Partners, the McArthur Basin has a “tremendous gas supply” potential with its world class rocks similar to US shale. The fact that it is closer to Asia is another plus as Asian countries are readying for "massive" fuel switching from coal to gas to move into a lower-carbon economy over the next 50 years. That spells a huge market for gas.

Also the new US$800 million (AU$1.14 billion) North East Gas Interconnector linking the NT with Queensland can offer an expanded market for Beetaloo players, including the massive LNG export projects in Gladstone.

Beetaloo lies in the broader McArthur Basin with at least 240 trillion cubic feet of potentially recoverable gas. It has more conventional gas resources than Australia is commanding now, noted American Energy Partners. It said what is most important is ensuring that the gas is profitably extracted and made commercially viable.

APLNG first cargo

Meanwhile, the Australia Pacific LNG project shipped its first cargo, on Jan. 9, according to its co-owner Origin Energy Ltd. The ship, Methane Spirit, carrying the trial cargo, left Curtis Island off Gladstone on Saturday, marking a milestone for the AU$25 billion project. The plant is operated by ConocoPhillips, which is the co-owner with Origin and China's Sinopec Corp, reports Reuters.

"These are incredibly large, complex projects and exporting the first cargo is a tremendous achievement,” Origin Managing Director Grant King said in a statement.