Australian gas is, in the scheme of things, relatively new. Gas was produced from a well at Lake Bunga in eastern Gippsland, near Victoria’s Lakes Entrance in 1924, but it was not until 1961 that Australia’s first commercial gas project was brought online when natural gas was connected to Queensland’s Roma Power Station. Adelaide, Brisbane and Melbourne received gas in 1969 and Sydney, even more recently, in 1976. All this suggests that the boundaries between ‘conventional’ and ‘unconventional’ - or tight - gas is shifting and relative.

Still, in Australia today there is a large and expensive difference between conventional and tight gas. Conventional gas flows easily through formations with high permeability – the capacity of the rock or sandstone to transmit fluids – formations, and from which, the gas is easy to produce and is economically viable.

Conventional reservoirs tend to be sandstones with porosities – the space between the rock – of 20 per cent or higher and with permeabilities of several to tens of millidarcies. Because gas from conventional reservoirs flows quite freely, when drilled, the gas flows easily into the wellbore.

However, as CSIRO Petroleum Resources Stream Leader for Unconventional Gas Dr Robert Jeffrey explains, tight gas is trapped in reservoirs that have a very low permeability.

“Tight reservoirs, or low perm reservoirs, are not usually economic to produce by simply drilling a well into them. You need to either stimulate the reservoir or find access to natural fractures in the reservoirs that you can produce the gas from,” says Dr Jeffrey.

Some coal seam methane operations also fall into the low permeability category, says Dr Jeffrey. “They certainly fall into unconventional gas,” he says. “However, some of them are low permeability and are sub-economic right now.”

The coal seam methane operations currently, he continues, are looking for the higher permeability seams that they can produce with less effort. “Otherwise, it’s sandstones or carbonaceous shale reservoirs that contain considerable amounts of gas,” he says.

Extracting tight gas is often a complicated and expensive process. As in a tight gas field a section of a well is drilled with more or less horizontal orientation that can extend through large parts of the reservoir (or producing interval) and therefore is more likely to intersect high permeability fractured zones, from which gas can be produced.

Another way to extract tight gas is to stimulate a vertical or a horizontal section of the wellbore by hydraulic fracturing. Hydraulic fracturing involves pumping a fluid into a section of the wellbore until the pressure increases to a point where it fractures the rock around the wellbore. That fracture is then opened by the fluid being pumped into it which pressurises the fracture, opening it and extending it deeper into the reservoir.

Eventually, says Dr Jeffrey, most of these hydraulic fractures are then propped. Propping is done by introducing solid granular propping agents into the fluid stream as it is pumped. And that propping material – which can be a sand or ceramic material – is carried into the fracture.

“Therefore, when you stop pumping, the fracture closes on that prop so you end up with a propped fracture that has very high conductivity or permeability with respect to the surrounding rock. The propped fracture then acts as a conduit for the gas to flow back to the well. But it also creates a large surface area so that all of the surface area of that fracture is available for the reservoir to produce gas into,” says Dr Jeffrey.

The question still remains: what, in Australia, constitutes tight gas? As Dr Jeffrey says, what is specifically defined as ‘tight’ is somewhat regional dependent. In Australia, he says, anything below about 0.5 of a millidarcy permeability is considered tight. However, he says some people say permeabilities as low as a tenth of a millidarcy constitutes a tight gas field while others consider formations with permeabilities as high as 1, 2 or 3 millidarcy as tight.

Because of the cost involved, Australian petroleum companies focus on conventional reservoirs. Recently, a Nexus/Shell joint venture has been drilling a tight gas well in its Echuca Shoals gas field, offshore Western Australia and Central Petroleum tight gas sand plays in Northern Territory’s Pedirka basin.

Lakes Oil is one Australian exploration company whose major focus is on unlocking tight gas in southeast Australia’s onshore Gippsland Basin. Lakes Oil Chairman Rob Annells says that Australians have not had to look at extracting gas from tougher reservoirs. And according to an article by Nina Morgan, Unlocking tight gas, almost half of BP's current North American gas production of around 2.4 billion cf/d is accounted for by tight gas.

In the United States, Mr Annells says, all the easy gas has run out. When he visits, people working in United States exploration companies remark “You Aussies make me laugh; you’re still doing all the easy stuff!”

About four years ago, Lakes Oil began drilling below Bass Strait’s Latrobe reservoir into the Strzelecki Sandstone. The Strzelecki sandstone sits below the Latrobe formation, which is the primary host of Victoria’s Bass Straits' oil and gas production. In the mid 1960s, the nation’s first offshore gas well was drilled in the Bass Strait by an Esso/BHP Billiton joint venture, which discovered the Barracouta gas field. Mr Annells says the field became one of the world’s best reservoirs. However, when a gas field’s resources are removed, its gas reserves naturally start to decline.

Mr Annells says Lakes Oil was interested in the area. The company drilled 1,500 m below the Latrobe formation and found gas the whole way down. The problem, explains Mr Annells, was that the permeability measured at only 0.1 millidarcy, compared to the 100s of millidarcies achieved in the Latrobe formation.

Lakes Oil has been working with United States oilfield technologies and services company Halliburton to bring new technologies and equipment into Australia to tap into the region’s tight gas supplies.

This year, the company has commenced work on the onshore Gippsland Wombat block and hopes to bring fraccing technology from the States to fracture the formation and create an artificial highway for the gas to flow. It might be costly, but as Mr Annells points out, bigger fracs create bigger cracks and bigger cracks mean more gas.

In the Australian gas exploration industry, Lakes Oil is venturing into unknown technological territory. Mr Annells says the plan is to introduce fracs ten times larger than those currently used in Australia and increase gas flow. And as far as he’s aware, Lakes Oil will be the first to introduce the new technology to the region.

Looking forward, Mr Annells says that exploring tight gas possibilities in New Zealand is on the horizon. He says that like Australia, NZ also has a bit of a gas problem - it is running out.

Australia is in a similar situation. Dr Jeffrey says that as the price of gas increases with time – a world-wide trend with any hydrocarbon – then unconventional gas reservoirs become attractive targets from which to produce the gas. He says that there are a lot of low permeability formations in Australia that are either marginally productive or not currently productive.

“The tendency is that as you go to lower and lower permeability you can find more gas but it becomes more expensive to produce,” he says. “Currently, the price of gas isn’t high enough, or the technology isn’t available at a cheap enough cost to make them [tight gas fields] productive.”

However, as demand for gas increases in a more environmentally conscious world, technological innovations by Australian petroleum exploration and production companies such as Lakes Oil will see Australia’s tight gas reserves gradually tapped.