Territory Sands is backing itself to become one of Australia’s key frac sand quarries. The results could have a significant impact on the natural gas industry.
Territory Sands has embarked on a journey to become a major player in the frac sand industry, which could supply significant gas projects in the Northern Territory.
The company has three frac sand deposits, totalling around 108 million tonnes of sand. Its location means it is within a trucking distance of between 50 and 150 kilometres from most Beetaloo Basin gas wells.
Nigel Doyle, the company’s managing director, sits on the board of Territory Sands alongside Michael Ashton, Stephen Gavin, David D’Astoli and William Riccardi, who serve as non-executive directors. Doyle spoke to Quarry about how the company is ideally poised to support the gas wells in the Beetaloo Sub-Basin.
The Beetaloo Basin is far from a small Northern Territory gas reserve; some experts have pointed to its reserves being “globally significant.”
The Beetaloo Sub-Basin, which is 500 kilometres from Darwin, is estimated to have 500 trillion cubic feet of gas alone within its Velkerri B layer without accounting for other geological layers known to be gas-bearing.
Last year, the Northern Territory Government gave the green light to enable production within the Beetaloo Basin and recently awarded major project status to Tamboran Resources’ gas project in the area.
“Back in 2019, we realised the potential size of the Beetaloo Basin shale gas resources and identified the need for frac sand to be utilised in the fracture stimulation of these wells. Current estimates are around 11,000 tonnes of sand will be used to frac each gas well,” Doyle told Quarry.
“In America, 80 million tonnes of sand is used each year for fracture stimulation to produce shale oil and gas. We formed a private company in 2019 and were backed by Titeline Drilling out of Ballarat for initial start-up funding. Even today, there is no dedicated frac sand quarry in Australia, and frac sand is imported from California and Saudi Arabia.”
In simple terms, to conduct fracking in shale basins like Beetaloo, operators use large volumes of sand and water with high pressure to drill holes that infill and prop open fractures in the target shale formations.
This method creates the required conductivity for oil and gas to flow from the shale to the surface through the permeable sands.
But it is not quite as simple as using any sand available, like beach sand or desert sand.
Frac sand is a highly specialised material that is excellent quality, clean, and rounded quartz sand.
Territory Sands’ frac sand from the Larrimah area has a high purity of 99.3-99.4 per cent SiO2 after processing. Its Vermelha Project is estimated to contain 51 million tonnes of frac sand, followed by its Forest Hill South project (36 million tonnes) and Forest Hill North project (20 million tonnes).
The process of hydraulic fracturing has been used globally for more than 60 years in the oil and gas industry. Territory Sands’ research discovered that no frac sand suppliers were known in the Northern Territory, while there were a limited number in Queensland and South Australia.
This created a void in the market, which Territory Sands identified, where Beetaloo Basin projects would have to import frac sand from international or interstate sources.
In comparison, Territory Sands’ sand quarries are within 150 kilometres at most from the Beetaloo Sub-Basin gas wells and between 500 metres and eight kilometres from the Stuart Highway.
The company has conducted a series of tests across the past five years to verify the quality of its frac sand and its ability to be used in hydraulic fracturing.
“The early years went reasonably smoothly. We were able to get on the ground, drill and identify over 100 million tonnes of fine sand on a number of exploration tenements and then apply for quarry leases to secure those resources,” Doyle said.
“Geotechnical testing in Australia and overseas proved the sand to be in spec for use as proppant in fracture stimulation, and the potential quarry locations are adjacent to the Stuart Highway and within trucking distance to the Beetaloo Basin well sites.
“Land access issues and Native Title delays have at times slowed down our journey, but those issues are likely to be felt Australia-wide for all operators in the extractive industries. Trying to source ongoing funding for junior explorers and private companies has also been tough over the last year or two.”
The company has also discovered potential silica sand resources in its research from frac sand. Silica sand’s primary uses are in the glass-making and foundry industries, with Asia being the biggest silica sand market in the world. While research companies like IMARC Group have predicted major market growth for silica sands, Doyle said the company’s proximity to the market would make it difficult to pursue it.
“We started off looking for frac sand and then identified potential silica sand resources in the area, and we were able to drill an Inferred Resource of 174 million tonnes of silica sand that can be processed to a quality suitable for glass making. Our best quality frac sand is around 99.3 per cent SiO2 and suitable for use as foundry sand, although we are too far away from any market for it to be of use,” he said.
“The company also has three quartz tenements within 100km of Darwin Port, with processed quartz once crushed and pulverised to silica sand of 99.85 per cent SiO2 and less than 100ppm Fe2O3, making it suitable for use in solar panel glass. We are looking for investors to fund further exploration and development of these tenements.
“In terms of construction sand, silica sand and foundry sand into the Darwin and export markets, there needs to be both private and government investment in nearby rail infrastructure to make that market a reality. Transport costs by road just don’t make it currently viable. Both Darwin and Katherine will shortly be looking at acute shortages of fine concrete sand due to various government environmental decisions and policies over recent years, and given around 98 per cent of our sand is less than 1mm in size, we will have large resources of natural sand for use in the construction industry and use as thermal sand as the need arises.”
The Northern Territory Government’s recent approval to kickstart production in the Beetaloo Basin follows the Northern Territory Fracking Inquiry, also known as the Pepper Inquiry, which provided 135 recommendations for safe use of onshore fracking.
The overall report concluded that the risks could be mitigated if its recommendations were fully adopted. The NT Government’s adoption of these recommendations paved the way for production in the Beetaloo Basin.
Doyle said providing local fracturing sand could offer significant savings for these companies operating in the Beetaloo Basin.
“In terms of frac sand, Beetaloo gas companies are wasting $5-6 million per well by importing sand rather than using local frac sand, so there is a definite market there,” he said.
“In 2025, we hope to build our first frac sand quarry near the township of Larrimah to supply frac sand to the Beetaloo Basin and fine concrete sand to Katherine. We have a water licence to wash our sand issued by the NT Government with two bores already drilled. We are also perfectly positioned for future sand requirements for the Sun Cable solar project if it comes to fruition.” •
For more information, visit territorysands.com.au
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