Corrected: First gas from Australia's Beetaloo puts shale ambition to the test

Beetaloo Energy Australia

21/08/2026 03:28

 (Corrects in paragraph 10 to show that Liberty supplies
drilling services, not drilling rigs)
    * Australia set to produce first gas from shale  
    * Shale dream faces dense rock, political and infrastructure
challenges
    * U.S. funding and expertise, Japanese investment boost
confidence
    * Beetaloo gas could meet local and Asian demand   

    By Helen Clark
    PERTH, Aug 21 (Reuters) - Deep in Australia's Red Centre,
gas is set to start flowing next month from the sprawling
Beetaloo basin to Darwin 500 km (310 miles) north, in what
developers hope kicks off the country's own U.S.-style shale
revolution.
    The prospects for the Beetaloo are vast. Geoscience
Australia data shows it holds 7 trillion cubic feet of gas,
fuelling local government dreams it will power data centres in
the underdeveloped Northern Territory and feed liquefied natural
gas sales to Asia from the world's second-largest LNG exporter.
    But the challenges are big, too. It needs new pipelines that
will cost billions of dollars to reach distant demand centres
and faces political hurdles, including Australia's new policies
requiring data centres to be primarily powered by renewable
energy and LNG projects to reserve 20% of their gas for the
local market.
    Tamboran Resources  TBN.N  will send an initial 40
terajoules (37 million cubic feet) a day of gas from its
Shenandoah project next month, followed later this year by
Beetaloo Energy's  BTL.AX  15 terajoules — modest volumes that
will meet Darwin's daily use and help operators understand how
quickly a well's gas might decline.
    Tamboran CEO Todd Abbott, who joined in January from U.S.
shale producer Seneca Resources, said in a decade the company
expects to be producing more than 1 billion cubic feet of gas
per day. That could fuel a 9% increase in Australia's LNG export
capacity. 
    
    OLD ROCKS, NEW MONEY
    The Beetaloo is frequently compared with the Marcellus shale
in the U.S. but is far older at 1.3 billion years versus around
400 million, with much harder, more compacted rocks as a result.
    It is also unique among shale plays, such as in the U.S. and
Argentina, in that it has not already been developed as a
conventional petroleum resource, said Martin Wilkes, a principal
at RISC Advisory in Perth. So it lacks infrastructure.
    So far, Tamboran and its partners have spent A$1 billion 
($713 million) on exploration and appraisal drilling, a
spokesperson said.
    To fund development, Tamboran raised over A$280 million in
April in Sydney and New York, where it listed in 2024 to tap
investors more familiar with shale projects. 
    In addition to U.S. money, service providers from the
American shale patch are active in the Beetaloo, including
Liberty Energy  LBRT.N , whose founder Chris Wright is the U.S.
energy secretary. Liberty Energy supplies drilling services to
Tamboran.
    Early this year, Japan's top oil and gas company Inpex
 1605.T  took a stake in Beetaloo acreage controlled by
Texas-based Formentera Partners, in a symbolically significant
vote of confidence as Japan is the main market for Australian
LNG.
    "You need a party with deep pockets who's willing to deploy
billions of dollars over several years before being able to
prove up a large-scale commercial play, and they've never had
that until now," said MST Marquee analyst Saul Kavonic.
    An Inpex spokesperson said the company had recognised the
potential of the Beetaloo since 2012, when it greenlit its
Ichthys LNG plant in Darwin. 
    There is no shortage of potential demand for Beetaloo gas.
    Inpex has said the gas could help fill Ichthys or underpin
an expansion.
    Similarly, Australia's no. 2 gas producer Santos  STO.AX ,
which plans appraisal drilling in the Beetaloo, has approval to
expand its Darwin LNG plant to 10 million tons.
    Beetaloo Energy has proposed a data centre, one of roughly a
dozen data centre projects planned for the Northern Territory
that a regional official has said could use Beetaloo gas.
    
    SHALE NEEDS SCALE
    To match the U.S. shale revolution, scale and cost-cutting
will be key.
    Beetaloo CEO Alex Underwood said a small number of wells is
expensive but costs fall once drilling is continuous. 
    "Understanding the interplay between capital expenditure and
production profiles will really be the key determinant of how to
scale up production in the future," he said in an interview.
    Developers plan to use locally produced sand in their
hydraulic fracturing, which Beetaloo Energy estimates could save
A$5 million per well in transport expenses, a 15% reduction.
    "It's minute efficiency everywhere. Pushing everything to
its limit is what's making this stuff economic," Wood Mackenzie
analyst Anne Forbes said.     

($1 = 1.4025 Australian dollars)

 (Reporting by Helen Clark; Editing by Tony Munroe and Sonali
Paul)
 ((helen.clark@thomsonreuters.com))