Australia's unconventional future: where next?

2019 ◽  
Vol 59 (2) ◽  
pp. 654
Author(s):  
Christopher Meredith
Keyword(s):  
East Coast ◽  
Gas Production ◽  
Eastern Coast ◽  
Market Demand ◽  
The Pacific ◽  
Eastern Australia ◽  
Future Supply ◽  
Rapid Transition ◽  
Gas Market ◽  
Gas Supply

Eastern Australia is now reliant on coal-seam gas (CSG) for its domestic gas supply; in 2018, it accounted for two-thirds of total eastern coast gas production. Australia has seen a rapid transition from relying on ‘conventional’ resources to relying on ‘unconventional’ gas supply. As legacy conventional supply sources mature and decline, exploration has been insufficient to keep up with market demand. This has created the opportunity for Australia’s vast CSG resources to fill the gap. But the development of CSG has been neither easy nor straightforward. And the costly requirement to drill hundreds, if not thousands, of wells in every single development has driven up the cost of supply. Most CSG reserves will be produced for the Pacific Basin LNG market via the three LNG projects on the east coast of Queensland. However, it is the resources beyond these LNG projects that will need to be developed, so as to ensure future supply to the east coast gas market. It is these other resources, both CSG and shale, that we evaluated to gain a picture of future gas supplies and costs. Our indicative economics showed that alternative CSG resources and Beetaloo shale both have high well-head break-even costs. In addition, the infrastructure required to get them to market will be expensive. The high costs, coupled with the demand from the LNG plants of Gladstone leads us to conclude that eastern-coast gas prices are likely to remain closely linked to global LNG prices for the foreseeable future.

A reserves driven view of the eastern Australian gas supply and demand balance through the 2020's

2017 ◽  
Vol 57 (2) ◽  
pp. 526
Author(s):  
Will Pulsford
Keyword(s):  
Supply And Demand ◽  
Critical Role ◽  
South Australia ◽  
Market Outcomes ◽  
Natural Gas Markets ◽  
Eastern Australia ◽  
Gas Market ◽  
Gas Fields ◽  
Key Participants ◽  
Gas Supply

The Australian Energy Market Operator (AEMO) issued a Gas Statement of Opportunities in March 2016, which reports that gas supply to the domestic and liquefied natural gas markets in eastern Australia will be largely satisfied by proved and probable reserves until 2026 and by the addition of contingent resources until 2030. However, in parallel, there are widely reported concerns by energy consumers of insufficient gas supplies to meet demand by the early 2020s and a lack of new gas supplies to replace existing expiring contracts. Gas shortages have already contributed to black outs and load shedding events in South Australia. This paper reviews the eastern Australian gas supply position at a basin level. The AEMO basin level supply forecasts are reviewed and adjusted to generate forward profiles, which are consistent with reported reserves levels, production histories and depletion behaviour of typical gas fields. The revised supply forecast is compared with the AEMO’s demand profiles, and the likely commercial behaviour of key participants in the market is considered to build a picture of the domestic gas supply-demand balance through the 2020s. This analysis provides a transparent link from market outcomes back to the underlying reserves classifications to guide interpretation of supply-demand forecasts, and highlights the critical role of key suppliers in the eastern Australian gas market in the coming decade.

Production and development across Australia 2016

2017 ◽  
Vol 57 (2) ◽  
pp. 363
Author(s):  
Frankie Cullen
Keyword(s):  
Coalbed Methane ◽  
East Coast ◽  
Price Volatility ◽  
Volatile Oil ◽  
Gas Production ◽  
North West ◽  
The North ◽  
Start Up ◽  
Reduction Strategies ◽  
Gas Supply

In 2016, sustained depressed and volatile oil prices led companies to continue cost reduction strategies. Proposed developments have seen delays and reductions in scope as a result. Australian oil production declined by around 10%. However, new and continued liquefied natural gas (LNG) production bolstered both Australian and global gas supply. Australia was the strongest contributor to global LNG growth in 2016, showing the biggest year-on-year increase. In the first half of 2016, 20% of global LNG came from Australia, second only to Qatar with 29% of the market share. Australia remains on track to become the world’s largest LNG producer in the next 3–5 years. 2016 saw the start-up of Gorgon LNG in March, the first of Chevron’s two North West Shelf LNG projects and the third of several producing, developing and proposed LNG projects within the North Carnarvon Basin – already Australia’s most prolific producing basin. On the east coast, development of the coalbed methane (CBM) to LNG projects continued with an additional train brought onstream at each of the Origin/ConocoPhillips-operated APLNG Project and Santos’ GLNG Project. This further increased production in the Bowen–Surat Basins and drove discussions around the ability of east coast gas to meet both the demands of the LNG projects and ensure continued domestic gas reliability. Additional gas may be required for both, opening opportunities for production from other basins. Gas production continues to drive the Australian industry, with substantial inputs from LNG and unconventional operations. The next phase, in all sectors, will be key to Australia’s future in the global energy market. Will it be able to overcome the expected challenges of global oversupply, continued price volatility and domestic reliability concerns to fulfil its potential?

Meeting demand in a new era of east coast gas supply

2019 ◽  
Vol 59 (2) ◽  
pp. 686
Author(s):  
Will Pulsford
Keyword(s):  
East Coast ◽  
New Era ◽  
Demand Growth ◽  
Historical View ◽  
Operational Life ◽  
Gas Market ◽  
The Government ◽  
Gas Fields ◽  
Project Life ◽  
Gas Supply

Historically LNG projects have been established to monetise large gas finds in remote areas with little existing gas demand. The development of gas supply to the LNG project generally stimulated demand growth in the domestic gas market. As the supplying fields depleted, the LNG projects faced competition with domestic producers for declining gas supplies, but this was late in the project life when LNG plant capital had already been recovered. Recently, LNG export projects have been established within existing mature gas markets, most notably in Australia and North America. These plants now face competition with domestic gas consumers for access to feed gas from the beginning of their operational life when strong revenue has the greatest impact on the return earned on capital invested, with the greatest stress felt in Australia. This paper considers the underlying causes of domestic price rises experienced in Australia following the start-up of LNG export supplied from gas fields linked to the domestic market and the response by both plant developers/operators and the government. This historical view is used to inform forecasts of how the east coast gas market will react to the interplay between domestic and LNG plant demand, declining Bass Strait production, maturing CSG operations, LNG imports and completion of the Northern Gas Pipeline. In particular the ability of gas supply and pipeline capacity to meet the strongly seasonal domestic demand in Victoria and to a lesser extent NSW will be examined, together with the linkage to counter-cyclical seasonal demand for LNG from the Queensland LNG export plants in the key north Asian markets.

Evolution of the east coast gas market

2018 ◽  
Vol 58 (2) ◽  
pp. 513
Author(s):  
Philip Byrne
Keyword(s):  
East Coast ◽  
Regulatory Frameworks ◽  
The Us ◽  
Major Transition ◽  
Gas Market ◽  
Gas Fields ◽  
Eastern Seaboard ◽  
Gas Supply ◽  
Australian Industry

This extended abstract reviews how the east coast gas market is managing the major transition from being a ring-fenced domestic market to being part of an interconnected global trading market, and what still needs to be done to rebalance after half a decade of disruption. The east coast gas market has a great future ahead of it, but only if Australia acts quickly to open up access to new gas supply sources as existing gas fields mature and decline. The presence of a global liquefied natural gas (LNG) supply market on the east coast now provides an incentive for gas producers to invest in new provinces and new plays at a scale the domestic gas market could not have supported on its own. This can only be good for competition in the east coast gas market over the medium to long term, and potentially open up enormous supplies for the growth of Australian industry, akin to the US shale gas revolution. To make the most of the resources and infrastructure we now have on the eastern seaboard, there is a role for governments to play in ensuring access to resources and providing stable, coordinated, robust energy policy and regulatory frameworks that attract investment in further growth in the gas sector, the benefits of which will flow on to Australian industry more generally.

LNG demand: do we have enough gas? Our gas prices? Our gas future? Somebody help!

2015 ◽  
Vol 55 (2) ◽  
pp. 494 ◽  
Author(s):  
Olumide Adisa
Keyword(s):  
East Coast ◽  
Comprehensive Analysis ◽  
Market Forces ◽  
Financial Constraint ◽  
Demand Forecast ◽  
Market Models ◽  
Term Contract ◽  
Gas Market ◽  
Gas Supply

These are interesting times for the eastern Australian gas market with Liquefied Natural Gas (LNG) projects coming online. The previously steady and long-term contract market for domestic gas supply on the east coast will be subject to market forces that are in part determined on the global stage. How will the market respond to these changes? The answer requires a comprehensive analysis of several scenarios and sensitivities around market models, as well as sophisticated modelling to capture these possibilities. This requires a tool that allows detailed modelling of the physical delivery of gas from producing fields, through pipelines and storages (including linepack) to demand points, with the capability to model any physical/financial constraint along the supply chain. The future lies in these scenarios and sensitivities. Employing a model developed through PLEXOS® gas module, this extended abstract analyses the effect of LNG on the domestic gas prices and supply in the short-to-medium and long-term. To establish any potential risk of gas shortage or particularly high prices, an analysis of the market was carried out from 2014-2023. Running several sensitivities on the demand forecast in this period, LNG effects on the market operations are examined.

VICTORIAN GAS MARKET-OPPORTUNITIES FOR PRODUCERS

1997 ◽  
Vol 37 (1) ◽  
pp. 755
Author(s):  
C.P. Demarte
Keyword(s):  
Gas Production ◽  
Market Place ◽  
Supply Contracts ◽  
Gas Industry ◽  
Market Growth ◽  
Field Development ◽  
Market Opportunities ◽  
Gas Market ◽  
Gas Supply

This paper addresses opportunities for producers in the Victorian gas market arising from the ongoing reform of the Australian gas industry. Much of the impetus of the change has occurred in Victoria but to date there has been little evidence of the benefit of market reform to producers. This is expected to change.Until recently, Esso/BHPP had a secure hold on gas production into the Victorian market. The renegotiation of their gas supply agreement with Gas and Fuel has created opportunities for limited production from new producers in the short term and significant market options in the long term.Gas marketing companies are preparing to change the way they do business. Rigid long-term gas supply contracts will be balanced with alternative arrangements with producers such as financing of field development, equity investment in projects, alliances, commodity exchanges and the use of underground gas storage and LNG.The formation of a spot market for gas will allow a transparent market place to evolve where forward physical and paper transactions can take place. Trading of gas futures and options will provide a mechanism for producers to take up any risk position that meets their corporate strategy.In the light of market growth forecasts, flexible supply arrangements and market restructure, the potential for supply of natural gas by producers into the Victorian market is considerable.

scholarly journals The Sweep of Long Water Waves Across the Pacific Ocean

1961 ◽  
Vol 14 (1) ◽  
pp. 120 ◽  
Author(s):  
R Green
Keyword(s):  
Pacific Ocean ◽  
Water Waves ◽  
East Coast ◽  
Tsunami Wave ◽  
Eastern Coast ◽  
Tide Gauges ◽  
Sea Waves ◽  
Shallow Water Waves ◽  
The Pacific ◽  
The Pacific Ocean

Seismic sea waves (tsunamis) are shallow water waves. The leading tsunami wave from the Chilean earthquake of May 22, 1960 at 19 hr 11 min 20 s G.M.T. arrived at Hobart in 12 hr. The tsunami was also recorded on tide gauges up the east coast of Australia and at Norfolk and Lord Howe Islands. The wave took 14 hr 04 min to reach Auckland, N .Z., but this is because of the low speed of the wave over the extensive submerged continental structure off the eastern coast of North Island. The tsunami was not recorded at Port Melbourne. From the travel-times the average depth of the Pacific Ocean between Tasmania and South America is 5500 m.

scholarly journals Gas markets – a bridge too far?

2019 ◽  
Vol 59 (2) ◽  
pp. 520
Author(s):  
Graeme Bethune ◽  
Rick Wilkinson
Keyword(s):  
East Coast ◽  
Supply And Demand ◽  
Market Potential ◽  
Energy Market ◽  
Supply Contracts ◽  
Sourcing Strategies ◽  
New Energy ◽  
Gas Markets ◽  
Gas Market ◽  
Gas Supply

The energy market is becoming more globalised and renewables are changing the supply and demand balance. Gas has been suggested as the bridging fuel to the new energy world – but is it a bridge too far? This presentation examines the global gas context and its impact on the Australian east coast gas markets, trends in energy supply options and sign posts for new directions. When the first liquefied natural gas (LNG) train started on Curtis Island, the gas producers had access to more than just the domestic market. The new overseas markets are also interconnected, so the Henry Hub, Brent oil and Chinese gas demand all have an influence on Australia’s east coast gas market. Potential LNG import terminals and net back pricing are changing the domestic gas market. The energy market is moving to renewables. This is not just an anomaly that will correct itself, but is based on lower renewable costs and distribution challenges. Moving relatively small amounts of energy long distances is a major challenge for Australia. Infrastructure, market hubs and sourcing strategies need to compensate for these challenges, and investment is needed to keep pace with the changes. Capital is a global commodity seeking the optimum return for the risk, but unconventionals, such as coal seam gas, are capital hungry. Government policies and support can be the key determinant for not only new investment but sustaining investment to meet existing gas supply contracts. Smart gas buyers will need to be agile and use deeper portfolio approaches for gas supply.

East coast gas: resource potential at different gas price scenarios (Part 2: commercialisation of unconventional gas resources)

2019 ◽  
Vol 59 (2) ◽  
pp. 542
Author(s):  
Joe Collins ◽  
Ian Cockerill ◽  
Zain Rasheed
Keyword(s):  
East Coast ◽  
Economic Cost ◽  
Gas Production ◽  
Unconventional Gas ◽  
Market Experience ◽  
The Usa ◽  
Gas Market ◽  
To Come ◽  
Unconventional Gas Development ◽  
Supply Costs

Rising gas prices in the eastern Australian gas market, as well as forecast supply shortages in years to come, are driving speculation about LNG import requirements for the market. There are significant similarities with the gas market experience in the USA in the early 2000s which led to the construction of many LNG import terminals, the parallel rise of unconventional gas production and the subsequent mothballing of the LNG import facilities at huge economic cost. A comprehensive east coast gas market study has been carried out based on the 2P reserves positions for domestic gas producers. This data has been paired with a range of gas demand forecasts to identify the probable supply gap on the east coast over the next 10 years. A market response to the high gas pricing in the form of new developments is already underway. In a separate paper (Part 1) all potential domestic sources of unconventional gas to fill that gap were analysed to determine likely gas supply rates, development schedules and breakeven supply costs for each of the major demand centres. This paper (Part 2) illustrates the required gas prices to drive unconventional gas development in Australia, the subsequent scale of new unconventional gas supplies to the forecast gaps in the market and describes how those developments can reverse the trend of rising prices over time.

scholarly journals One approach to the study of gas pricing based on gas supply systems modelling (the case of Northeast Asia)

2019 ◽  
Vol 114 ◽  
pp. 02004 ◽  
Author(s):  
Sergei P. Popov ◽  
Darya V. Maksakova
Keyword(s):  
Technological Development ◽  
Northeast Asia ◽  
Gas Production ◽  
Supply System ◽  
Unconventional Gas ◽  
Dual Analysis ◽  
Gas Market ◽  
Northeast Asian ◽  
Supply Systems ◽  
Gas Supply

The article deals with the approach to gas pricing analysis based on the use of optimization models of gas supply systems. The object of the study is the Northeast Asian gas market. The model of the excessive gas supply system in Northeast Asia is described. The primal problem of the model is to minimize the sum of gas production and transportation costs under the infrastructure constraints. The solutions to the primal problem are the volumes of gas produced in each production point and transported via each route. The solutions to the dual problem (dual variables or shadow prices) are node prices in the points of gas supply system, the producers’ rent and the transporters’ rent. It is highlighted that the dual analysis plays an important role. It allows evaluating price relations between the points of gas supply system, identifying export routs characterized by the highest rent, evaluating the competitiveness of suppliers in the different scenarios of technological development, energy policy and market environment. The analytical capacities of the dual analysis are illustrated by the study of the impact of “unconventional” gas development in the importing countries on the Northeast Asian gas market environment. When the costs of unconventional gas production rise, gas trade patterns change, more competitive players enter the market, and gas prices in all consumption points as well as producers’ rents increase. It is concluded that if importers seek to lower import dependency while keeping the same price level, they have to lower the costs of unconventional gas production by technological development and/or to subsidize the industry to make it more competitive.

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