PEL122 & PEL123 Fracture Stimulation Activities Environmental Impact Report December 2017 Prepared by: SAPEX Pty Ltd Level 35 Riverside Centre 123 Eagle Street Brisbane, Q 4000 Phone: (07) 3236 9800 Fax: (07) 3221 2146 DOCUMENT CONTROL PEL122 & PEL123 Fracture Stimulation Activities EIR Release Issue Date Version Purpose of Document Originator Review Review Date QA Review Approval Rev A Preliminary Draft for Tri- DC DL/JE/JM/JB 20/10/2017 Star review Rev B Draft for JBS&G Review SAPEX JBS&G 24/10/2017 SM DC 26/10/2017 Edits to environment Rev C JBS&G SAPEX 16/11/2017 SAPEX DC 17/11/2017 section by JBS&G Edits following Rev D SAPEX Stakeholder 1/12/2017 DC JE 05/12/2017 stakeholder consultation Final draft for Internal Rev E SAPEX DC 05/12/2017 JE JB 07/12/2017 Review Grammatical edits Rev G SAPEX DPC 22/12/2017 DC JB following DPC review Rev 0 Final for submission SAPEX DPC Rev 1 Contents CONTENTS ......................................................................................................................................................................... 3 SUMMARY .............................................................................................................................................................. 6 1 INTRODUCTION ............................................................................................................................................... 7 1.1 Location .......................................................................................................................................................... 7 1.2 Project Proponent .......................................................................................................................................... 8 1.3 About this Document ..................................................................................................................................... 8 2 LEGISLATIVE FRAMEWORK ............................................................................................................................ 10 2.1 Petroleum and Geothermal Energy Act and Regulations ................................................................................10 2.2 Statement of Environmental Objectives ......................................................................................................10 2.3 Environmental Impact Report ......................................................................................................................11 2.4 EIR / SEO Assessment and Approval ............................................................................................................12 2.5 Approval to Carry Out a Regulated Activity .................................................................................................12 2.6 Other Legislation ..........................................................................................................................................12 3 BACKGROUND TO HYDROCARBON EXPLORATION ........................................................................................ 15 3.1 Overview ......................................................................................................................................................15 3.1.1 Conventional hydrocarbon generation and accumulation .....................................................................15 3.1.2 Unconventional Hydrocarbon Generation and Accumulation ................................................................16 4 EXISTING ENVIRONMENT .............................................................................................................................. 17 4.1 Climate .........................................................................................................................................................17 4.2 Biophysical Environment ..............................................................................................................................17 4.3 Surface Water Resources .............................................................................................................................27 4.3.1 GAB Springs .............................................................................................................................................27 4.3.2 Lake Eyre Basin ........................................................................................................................................27 4.4 Arckaringa Basin Geology ...........................................................................................................................30 4.4.1 Structural Setting .....................................................................................................................................30 4.4.2 Stratigraphy .............................................................................................................................................30 4.4.3 Unconventional Oil and Gas Potential ....................................................................................................34 4.5 Hydrogeology ................................................................................................................................................38 4.6 Groundwater Use ........................................................................................................................................44 4.7 Heritage .......................................................................................................................................................48 4.8 Land Use ......................................................................................................................................................49 4.9 Socio-Economic .............................................................................................................................................51 5 DESCRIPTION OF FRACTURE STIMULATION ACTIVITIES ................................................................................. 52 5.1 Overview ......................................................................................................................................................52 5.2 Well Design and Construction .....................................................................................................................52 5.3 Fracture Stimulation ...................................................................................................................................54 5.4 Fracturing Fluids ..........................................................................................................................................58 5.5 Fracture Height Growth and Fracture Monitoring ......................................................................................60 5.6 Post-Stimulation Completion .......................................................................................................................62 5.7 Flowback and Initial Production Testing .....................................................................................................63 5.8 Temporary Holding Ponds ...........................................................................................................................63 5.9 Water Use ....................................................................................................................................................65 5.10 Other Aspects of Fracture Stimulation Operations .....................................................................................65 5.10.1 Waste Management ...............................................................................................................................65 5.10.2 Hazardous Materials Storage .................................................................................................................66 5.10.3 Spills and Emergency Response .............................................................................................................66 5.10.4 Clean-up and Rehabilitation ...................................................................................................................66 6 ENVIRONMENTAL IMPACT ASSESSMENT ...................................................................................................... 68 6.1 Aquifers .......................................................................................................................................................68 PEL122 & PEL123 Fracture Stimulation EIR-Rev 0 3 6.1.1 Leakage to aquifers due to loss of well integrity .....................................................................................68 6.1.2 Fracture propagation into overlying GAB aquifers .................................................................................70 6.1.3 Leakage of injected fluid to GAB aquifers through overlying strata or faults .....................................72 6.1.4 Impact on Permian aquifer potential ......................................................................................................73 6.1.5 Lateral migration of injected fluid in the Permian section ......................................................................73 6.1.6 Groundwater impacts from water use...................................................................................................73 6.2 Soil and shallow groundwater ....................................................................................................................73 6.3 Surface Water .............................................................................................................................................75