State Gas Secures 30.2 PJ 2P Reserve, Paving Way for Rolleston West Pipeline Project
State Gas Limited has independently certified a maiden 2P gas reserve of 30.2 petajoules at its Rolleston West Project, establishing a solid foundation for a pipeline-connected gas development aimed at the east coast market.
- Maiden 2P gas reserve of 30.2 PJ certified by NSAI
- Project supports 10 TJ/day pipeline-connected gas supply
- Gross economic value estimated between $360 million and $510 million
- Leverages innovative High Density Natural Gas (HDNG) technology
- Pre-development phase with key milestones targeted by 2028-2029
A Milestone for Rolleston West
State Gas Limited (ASX – GAS) has announced a significant advancement for its Rolleston West Project in Queensland with the independent certification of a maiden proved plus probable (2P) gas reserve of 30.2 petajoules (PJ). This certification, conducted by internationally recognised subsurface consultants Netherland, Sewell & Associates, Inc (NSAI), confirms a commercially viable reserve base capable of underpinning a pipeline-connected gas project supplying 10 terajoules per day (TJ/day) to the undersupplied east coast gas market.
The certification validates years of geological work, drilling, and production testing, and provides State Gas with the bankable reserves necessary to attract project financing, secure gas sales agreements, and form infrastructure partnerships. The project’s gross undiscounted economic value is estimated between $360 million and $510 million, based on prevailing east coast gas prices.
Technical Foundations and HDNG Innovation
The Rolleston West Project focuses on coal seam gas (CSG) production from the Bandanna Formation coals, with permeability and gas flow confirmed through extensive production testing, including the innovative use of State Gas’s High Density Natural Gas (HDNG) technology. This first-of-its-kind Australian technology compresses and delivers pipeline-quality gas, enabling early commercial sales and providing a flexible path to market ahead of traditional development timelines.
State Gas’s HDNG approach not only demonstrates productive capability but also offers environmental benefits by capturing gas that would otherwise be vented. The modular nature of the HDNG facility allows for scalable and relocatable operations, supporting ongoing appraisal and exploration activities across the broader Rolleston West acreage.
Development Pathway and Market Positioning
With the 2P reserve certification in hand, State Gas is advancing towards detailed engineering studies, environmental and regulatory approvals, and commercial negotiations with potential gas offtakers, including industrial users and power generators. The company aims to complete these milestones by the end of 2027, targeting construction commencement in early 2028 and first gas production by 2029.
The project’s strategic location near existing pipeline infrastructure, including the Gladstone/Wallumbilla network, enhances its attractiveness. State Gas is actively exploring pipeline connection options and shared infrastructure arrangements to optimise development costs and timelines.
Valuation Context and Future Upside
Recent market transactions provide a valuation framework for the Rolleston West reserves, with comparable deals indicating values ranging from approximately $1.1 million to $2.1 million per PJ. State Gas’s reserve certification and project economics position it well within this range, supported by a robust technical dataset and independent assessments.
Importantly, upside remains from ongoing appraisal drilling and exploration across the broader acreage, with contingent resources previously estimated and now partially converted into reserves. This suggests potential for reserve growth and extended project life beyond the current 2P base.
Bottom Line?
With certified reserves and a clear development roadmap, State Gas is poised to transform Rolleston West into a key east coast gas supplier, next steps will test its ability to secure financing and commercial contracts.
Questions in the middle?
- How will State Gas finance the transition from pre-development to construction?
- What are the prospects for expanding reserves beyond the current 2P certification?
- How will HDNG technology influence the project's cost structure and market access?
