South Australian geothermal explorer Petratherm sets up PetraGas to explore shale gas opportunities SOUTH Australian geothermal explorer Petratherm has created a new subsidiary to explore opportunities for shale oil and gas in Tasmania. PetraGas has applied for a petroleum exploration licence covering an area spanning 3,900 sq km, north of Hobart, prospective for conventional and unconventional oil and gas. The move into unconventional oil and gas exploration is a "low-entry costs, high potential gain" initiative for the group, Petratherm managing director Terry Kallis said. The tools and techniques used can help us leverage our core areas of expertise in basin geology and deep drilling and our knowledge of the gas and electricity markets. Petratherm is developing its flagship Paralana power project from hot rocks in the state's north. Last month, it won approval for a $13 million Australian Renewable Energy Agency (ARENA) grant from the Federal Government for Paralana and is working towards meeting all the precursory conditions. The grant is on a matching funding basis and Petratherm has to secure an additional $5 million in equity within six months and the commitment of joint venture partner Beach Energy to a 21 per cent share of the matching funding costs. It's an opportunity that aligns with our core skills. Our primary focus has been and will be our Paralana project. This move (into shale gas) is part of our commitment to shareholders to look at other projects that fit in with our skills and abilities. PetraGas has replaced Petratherm's former solar thermal-focused subsidiary Heliotherm. Mr Kallis said Heliotherm did not exist anymore and "the shell had been reconfigured to become PetraGas." Heliotherm's exclusive agreement with the University of Adelaide to develop a solar thermal integrated project under a $794,268 grant from the Premiers Science and Research Fund has also been abandoned. "The grant required matching conditions beyond what we were willing to contribute at that stage," he said. PetraGas expects to get the licence to explore in Tasmania in two to three months time. PetraGas will "arrange to meet with key stakeholders and the local community to ensure that a comprehensive two-way communication process is established from the outset."