Formentera Partners and Daly Waters Begin Beetaloo Gas Sales
Formentera Partners, through its Australian operating company Daly Waters Energy (DWE), and joint-venture partner Tamboran Resources (NYSE: TBN) have announced a major milestone for Australia’s natural gas industry, with the first commercial sales of natural gas from the Shenandoah South Pilot Project in the Beetaloo Basin.
The milestone represents the first-ever sale of natural gas produced from the Beetaloo Basin, marking a transition for the region from exploration and appraisal toward commercial development. The initial gas volumes will be supplied into the Northern Territory gas network and used to help meet energy demand in Darwin, the territory’s capital and largest city.
Gas produced by the project is being transported through the Sturt Plateau Compression Facility (SPCF), which began commissioning activities in late August. The facility has a nameplate capacity of approximately 48.5 million cubic feet per day (MMcf/d), equivalent to around 50 terajoules per day (TJ/d), providing critical infrastructure for the next stage of Beetaloo development.
The first gas sales represent an important step for the Northern Territory, which has long viewed the Beetaloo Basin as a potentially significant domestic energy resource. The development could strengthen the territory’s energy security while creating a foundation for broader industrial investment and future gas exports.
“For years, people talked about the potential of the Beetaloo, and today we’ve transformed that into the steady flow of natural gas to Territorians,” said Bryan Sheffield, Managing Partner of Formentera Partners.
Sheffield described the delivery of first gas as a significant achievement, particularly given the technical, logistical and infrastructure challenges associated with developing a frontier basin. He credited the cooperation of joint-venture partners, contractors, government authorities, Native Title Holders and local communities for helping bring the project into production.
According to the companies, gas volumes are expected to increase progressively, reaching the full contracted volume of 38.8 MMcf/d, or approximately 40 TJ/d, for the Northern Territory Government by the end of 2026. The supply arrangement is structured under a take-or-pay agreement that can extend for as long as 15 years.
Start-up and commissioning activities are also expected to be completed by the end of 2026, allowing the project to move toward more stable and consistent production.
From Exploration to Commercial Production
The first sales are particularly significant because the Beetaloo Basin has spent years in the appraisal and exploration phase. Formentera entered the basin in 2022 and has since established a substantial position covering approximately 1.9 million net acres through the core of the basin.
The company considers its acreage position one of the largest in the Beetaloo, giving it exposure to what it believes could become a long-life natural gas resource. Geological characteristics identified in the basin have drawn comparisons with established U.S. shale formations, including Pennsylvania’s Marcellus Shale.
Continued appraisal drilling and testing have provided additional information about the quality, scale and repeatability of the resource. Successful results have strengthened expectations that the Beetaloo could support sustained natural gas production over multiple decades.
The basin’s potential extends beyond supplying Darwin and other Northern Territory customers. With sufficient infrastructure and production growth, Beetaloo gas could potentially serve demand across Australia’s East Coast while also supporting the country’s LNG export industry.
Formentera’s strategy is therefore focused not only on establishing initial production but also on developing the basin at a much larger scale.
Expanding the Development Partnership
A further step toward large-scale development came in March 2026, when Formentera and DWE joined forces with INPEX, a major international LNG company, to advance development opportunities in the Beetaloo.
The partnership is intended to support the basin’s progression from a pilot-scale operation toward a broader development capable of producing significantly larger volumes of natural gas.
The relationship with INPEX could also provide a pathway for Beetaloo gas to participate in Australia’s LNG industry over the longer term. While the initial priority remains supplying the Northern Territory, the companies have indicated that future production could support LNG markets through strategic partnerships.
“For the next phase, we will be more than a partner, we will become an operator, which means more capability and more investment coming into the Territory,” Sheffield said.
The move toward operatorship is expected to give DWE a greater role in managing drilling, production and field-development activities as the project expands.
New Drilling Capacity Planned
The companies are also preparing for the next stage of drilling activity. In August, Formentera and its partners announced plans to bring a Helmerich & Payne FlexRig® from the United States to the Beetaloo Basin.
The rig will become the second Helmerich & Payne rig operating in the basin and is currently being prepared in Houston for transportation to Australia. It is expected to arrive in the Beetaloo during the second quarter of 2027.
The addition of another modern drilling rig is expected to support the companies’ plans for additional wells and further appraisal and development activity. Increased drilling capacity could accelerate efforts to evaluate the resource and establish the infrastructure required for higher production levels.
For a frontier basin such as the Beetaloo, access to suitable drilling equipment is particularly important because development requires substantial investment in wells, gathering systems, compression and transportation infrastructure.
A New Phase for the Beetaloo
The achievement of first gas sales marks a significant inflection point for the Beetaloo Basin. After years of exploration and appraisal, the region has now demonstrated its ability to deliver commercial natural gas into an operating market.
For the Northern Territory, the project could provide a long-term source of domestic gas while supporting economic activity, employment and investment associated with energy infrastructure and field development.
The initial contracted supply is relatively modest compared with the basin’s potential, but the companies see it as the beginning of a much larger development program. Increasing production will depend on further drilling success, infrastructure expansion, regulatory approvals, commercial agreements and continued collaboration with local communities and Native Title Holders.
Formentera and its partners ultimately envision the Beetaloo becoming a major natural gas-producing region capable of serving multiple markets. The immediate objective is to supply the Northern Territory, while the longer-term opportunity could include supplying Australia’s East Coast and supporting LNG exports.
With first gas now flowing and additional drilling capacity planned for 2027, the Beetaloo is entering a new stage of development. The transition from appraisal to commercial production provides an important foundation for future investment and could establish the basin as a significant component of Australia’s natural gas supply chain for decades to come.
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