The Northern Territory has reversed its two-year ban on fracking, opening up more than half the region to onshore shale gas development in a move expected to provide more gas to the east coast.

Hydraulic fracking is a drilling process by which gas trapped within rocks is accessed by using high-powered water and chemicals to crack open the rocks and allow the gas to flow into a well and up to the surface.

The NT becomes the third state or territory to approve fracking in Australia, after Queensland and South Australia.

It is controversial as there have been dangerous gas leaks as well as concerns that the chemicals used could potentially enter and pollute underground water sources. 

More than half of the Territory’s prospective shale gas is located in the Beetaloo Basin between Katherine and Tennant Creek with the region holding more potential shale gas than the entire Bowen Basin, which has driven Australia’s LNG boom.

Construction of the 622km Northern Gas Pipeline connecting Tennant Creek with Mount Isa is underway and will deliver around 90 terajoules of gas to the east coast.

Pipeline builder Jemena believes this can be expanded to 700 terajoules – enough to meet the daily gas demands of Brisbane, Sydney and Adelaide alone – once gas begins to flow.

“Should development of the Beetaloo Basin proceed in the short term, we are seeking to invest significantly more capital to extend and expand the Northern Gas Pipeline. This could create around 4000 new jobs during the project’s construction phase,” Jemena managing director Paul Adams told media on the coast.

“Early estimates place the cost to extend and expand the Northern Gas Pipeline at around $3 billion to $4 billion. This investment would be in addition to Jemena’s current project.”

The move is likely to make the extension of the gas pipeline a viable project.

That project would link Mount Isa and the Wallumbilla Hub as well as opening up the gasfields of the Galilee Basin.

- Derek Barry