Exploration for naturally-occurring hydrogen is about to start in South Australia
Exploration records dating back more than a century have led to a search for sub-surface hydrogen which could be there for the drilling in regional South Australia.
Fairy circles on South Australia’s Yorke Peninsula and Kangaroo Island could be a sign that the holy grail of the energy transition - naturally occurring hydrogen - is there for the taking.
Brisbane-based company Gold Hydrogen has picked up an exploration tenement covering the lower half of the Yorke Peninsula, and with promising historical drilling records in hand, is poised to kick off an early stage exploration program.
It’s a process which couldn’t have occurred even a year ago, with the South Australian Government serendipitously amending the state’s resources Act in February of this year to declare hydrogen a regulated substance, allowing companies to apply for exploration licences.
Gold Hydrogen director Neil McDonald says the company is the first in the nation to be granted a permit to explore for hydrogen.
“Hydrogen at up to 80 per cent purity was accidentally found in South Australia when gas testing was done at two oil bores drilled on the southern portion of Yorke Peninsula and Kangaroo Island,’’ Mr McDonald said.
“Gold hydrogen would be nirvana to energy companies - a cheap energy source without the carbon emission problem - incredible.
“Early modelling shows the South Australia field could produce enough hydrogen to power a million homes for 40 years.’’
The work is yet to be done though, and the company aims to soon start on a geophysical exploration program including airborne surveys and potentially seismic work.
And the signs from previous exploration - and the presence of the aforementioned “fair circles” - is promising.
The SA Department for Energy and Mining says on its website that hydrogen has previously been detected in wells drilled in the Cooper Basin and on Kangaroo Island and the Yorke Peninsula.
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The latter two wells were drilled in the first half of the 20th century, however more recent work published this year says the presence of fairy circles can be an indicator of hydrogen venting.
“‘Fairy circles’ are depressions on land caused by venting of hydrogen or gas,’’ the Department says.
“The fairy circles identified ... are roughly circular, pink ephemeral salt lakes.’’
The research cited says their work “suggests that Australia could be one of the most promising areas for H2 exploration, de facto a couple of wells already found H2, whereas they were drilled to look for hydrocarbons.’’
Mr McDonald told The Australian that fellow director and the company’s geologist Luke Titus had looked globally at the geological conditions supportive of the presence of natural hydrogen.
Using a discovery in Mali as the baseline, Mr Titus came up with a number of possible hydrogen-prospective areas, and South Australia was on the list.
Once Mr Titus went through the archives, he found that SA’s chief geologist Keith Ward, in drilling dating right back to 1916, hit high purity hydrogen while drilling for oil and gas.
On the exploration front, Mr McDonald said the company was working with CSIRO, which had technology which could “sniff” hydrogen, but an airborne survey in order to identify sub-surface structures was likely to be on the cards also.
“There are a couple of existing wells so it is possible that you could twin, or replicate those positions as well, but that’s probably a bit of a wildcat sort of well,’’ Mr McDonald said.
Mr McDonald said the first steps were to engage with relevant stakeholders and landholders before any on-ground work took place.
Gold Hydrogen is currently funded through private equity, but Mr McDonald said other forms of private and public funding, perhaps even an initial public offer, would be considered as work progressed.
“We’ve had some international inquiries from some larger, traditional oil and gas companies which wish to offset their current predicaments, so that may not mean that we do an IPO, but we’re not ruling it out.’’
Gold Hydrogen forecasts that naturally-produced hydrogen could be accessed to the wellhead for 50c per kg, far cheaper than the $3-$9 per kg it takes to produce manufactured hydrogen.
Mr McDonald’s previous roles include business development manager for US-owned Tri-star Petroleum and general counsel and company secretary for Hamilton Island.
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