Demand hits the gas in Surat Basin

OCT 2010

Mammoth resources deals have many small town economies in the Surat Basin on the verge of a boom and property investors are starting to ‘pick the eyes out of it’.

Located three hours west of Brisbane, $100 billion worth of projects are scheduled for 2013 in the resource rich region, mostly in the coal seam gas (CSG) sector.

Much of the extracted CSG is piped to Gladstone which homes the closest shipping port and liquefied natural gas (LNG) conversion facilities.

National giant Origin Energy, Brisbane’s Queensland Gas Company, Xstrata and Syntech Resources are heavily involved in the region. The biggest player is British-owned BG Group which has $80 billion of export deals signed with China and Japan.

While resource projects are creating the initial boom, Surat Basin Corporation director Greg West says the region is gearing up for the long term.

“It’s important for people to realise that it’s not just the CSG projects driving economic growth in the Surat Basin, the flow-on effects in additional business sectors and infrastructure will create huge ongoing expansion in the region,” says West.

“The diversity of industry growth ensures long-term prosperity and means that Chinchilla for example will not be affected by the ‘boom bust’ of a typically coal town.”

The Surat Basin is forecasted to capture foreign investment worth up to $40 billion while 18,000 jobs would be created. It is understood the Queensland Government would reap around $850 million each year in royalties.

The Government’s decision to closely monitor CSG activity in the Surat Basin will also help create additional value to invest in the region’s property market.

“The Government is basically regulating the CSG sector in order to create sustainability for a hundred years,” says West.

“The demand in the property market to cater for this long-term growth is enormous and housing is returning some of the highest returns in the country. Last year more than 300 homes were built in Chinchilla alone and if you look back into the 1990s, that many houses weren’t built in the entire decade.”

West is also a director of Surat Basin Developments and Surat Basin Homes which specialises in property sales in Chinchilla, Miles and other surrounding growth towns such Roma and Tara.

The Surat Basin Industrial Park is selling robustly in the commercial sector while the company’s residential offerings start with blocks from $85,000.