February 2025

Wood Mackenzie’s latest Horizons report indicates natural gas is essential for the energy transition, enabling increased renewable energy use and a faster move away from coal.

According to the report, natural gas is projected to be a key enabler of the energy transition, facilitating both renewable growth and coal displacement.

Recognising natural gas as a critical “bridge” fuel, the report underscores its essential role in the energy transition. Despite growing renewable adoption, natural gas remains vital for meeting energy needs and lowering medium-term emissions. Massimo Di Odoardo attributes gas’s success—evidenced by an 80% demand surge over 25 years—to its widespread availability, affordability, storage capabilities, and relatively cleaner profile.

Kinetiko Energy (ASX: KKO) has reported continued progress in its production test well program, with sustained gas presence and observed gas flaring in both wells. The second production test well, 271-KV06PT, has reached its terminal depth of 631m and has successfully flared gas, confirming increasing gas production. The first production test well, 271-23PT, which was initially thought to have intersected a small, well-sealed compartment, has now demonstrated growing gas presence, revising the earlier assessment.

Ongoing observations indicate that gas flow steadily improves, aligning with continuous gas indications recorded throughout the drilling process. Based on these results, Kinetiko has initiated a drilling optimisation study to assess the extent to which drilling procedures may have created a temporary gas blockage or “skin” effect in the well bore, potentially restricting initial gas flow. The study is already underway, with core samples and data sent to Perth for laboratory testing.