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Galilee Energy explains pursuit of Chile’s CBM resources

World Coal,

Chile’s reserves of coalbed methane (CBM) make it an “extremely attractive gas market”, according to industry player Galilee Energy.

Galilee has released a new presentation on its company strategy, in which it explains some of the reasoning for its pursuit of unconventional gas within Chile’s coal fields.

The company recently announced it had signed a memorandum of understanding (MOU) with Chile’s state-owned oil and gas company, Empresa Nactional del Petróleo (ENAP).

ENAP and Galilee Energy are set to develop a CBM project in a region covering approximately 7200 km2 in the northwest are of the Magallanes Basin. The companies will evaluate the potential for large-scale CBM production. Previous work has indicated the key objective to be the Eocene-Oligocene Loreto Formation, which contains 10 – 20 m of coals at depths ranging from surface to over 120 m.

The Chilean opportunity

Galilee Energy noted that Conoco Phillips has also recently announced a partnership with ENAP to explore unconventional hydrocarbons in other areas of the Magellanes Basin.

“The Magellanes opportunity represents company-making potential”, according to Galilee Energy. This is because the Basin has a significant area, with proven coal thickness and extent, as well as showcasing very large gas in place. The Basin has also already had demonstrations which have proved gas content within the coal seams.

Development of gas from coal seams in Chile could prove vital for the country, as Galilee noted the South American country currently imports around 80% of natural gas at high prices: a domestic supply of gas from coal seams could reduce this cost. Because of this potential, Galilee noted that Energy exploration and development in Chile, particularly southern Chile, is a national imperative and enjoys strong political support.”

CBM in the Magallanes Basin would also benefit from a close proximity to existing markets and extensive pipeline and other infrastructure. The Basin is also a well-established hydrocarbons province with activity including international majors and mid-tier companies, such as Geopark.

Galilee said that it believes the young Eocene age coals are analogous to the Walloon coals in Queensland which have much higher permeability at target depths in the 200 – 600 m range.

CBM key to company portfolio

In its presentation, Galilee Energy said that developing CBM reserves in Chile represented a key part of company efforts to build a broader exploration portfolio, which is one integral pillar of their ‘three part strategy’.

CBM exploration itself is also noted as “a core strength of [the Galilee] board and management”. 

Written by Sam Dodson

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