Geophysical and geological surveys and drilling in the Northern Adelaide Plains of South Australia have located a Tertiary palaeochannel incised within Proterozoic bedrock. Present data indicate favourable reservoir and seal conditions for the storage of natural gas in the channel, although the headward extent and configuration is not yet fully defined. The channel is presumed to be filled with sands and gravels, and is known to be capped by clays and lignites. Subsequent Cainozoic deposition has buried this channel to a depth of approximately 350 m below the present-day ground surface. Based on seismic evidence, the channel is approximately 1800 m wide and extends north-eastwards from Port Gawler for at least 5 km, and possibly up to 10 km, and has a gentle south-westerly gradient. The infilling sands and gravels appear to have an average thickness of about 20 m, and should have sufficiently high porosity and permeability to constitute a good reservoir. The overlying caprock of clays and lignites is approximately 20 thick, and forms a sheet-like body which infills the uppermost part of the channel and directly overlies bedrock on either side. The underlying bedrock of tight limestone and dolomite near Port Gawler, and weathered clayey siltstone to the east, probably has low permeability, similar to that of the clays and lignites. Assuming a realistic effective reservoir porosity of 15%, a gas storage pressure of 2800 kPa (400 psi), and an onshore channel length of 7.5 km, the estimated gas storage capacity is 280 million m3 (10 BCF). This is the minimum requirement for optimum storage utilisation. It has been recommended that further drilling and geophysical surveys be done to define the reservoir geometry and engineering characteristics.