Addressing the Australasian Oil & Gas Conference in Perth yesterday, Arc managing director Eric Streitberg said the company planned to begin a 20-well, three-year, drilling program in WA’s onshore Canning Basin in May.

Streitberg said it the program may just provide the state with much-needed domestic gas supplies.

“The Canning Basin is the least explored Paleozoic aged basin in the world and could produce the gas required to meet the shortfall in the state, which has been described by Government as a crisis,” Streitberg told the conference.

He said Arc had taken a very “pro-active” approach to the crisis and had “substantially” increased its position in onshore basins in the last six to nine months, including acquiring an extensive acreage position in the Canning Basin.

The company plans to spud the Stokes Bay-1 well there in either April or May. It will be the first in up to eight high-impact exploration wells planned for the region, he said.

Streitberg also said a near trebling of liquefied natural gas prices in the past 10 years meant there was little commercial incentive for offshore producers to sell more domestic gas.

Another concern for the WA government was the increasing number of industrial customers in the state that could not obtain gas for projects.

“The situation is approaching crisis point and an extra 200-300 terajoules per day of gas is required by 2010,” Streitberg said.

He said while gas consumers had welcomed the WA Government’s plan to reserve 15% of future LNG production for domestic market, producers had generally resisted the idea on the back of concerns over the commercial and operational implications.

“The best outcome for the state and WA gas consumers is to find a major new supply of onshore gas,” Streitberg said.

“Arc is the only company with the potential to deliver such a major onshore gas supply.”