Follow us:
Subscribe to our newsletter

logo

  • News
  • Projects
  • Business and Finance
  • Innovation
  • Products and Services
  • Events
  • Online Magazine
  • Advertise
  • Contact
Home
  • News
  • Projects
  • Business and Finance
  • Innovation
  • Products and Services
  • Events
  • Online Magazine
  • Advertise
  • Contact
Quotes by TradingView

Report finds LNG import projects needed to meet gas shortages

27 Feb, 2019
194
LNG image by Shutterstock.


A new report outlines that LNG import projects are ‘urgently needed’ in both Melbourne and Sydney to counter the risks of a growing gas shortage in Australia’s southern states.

The information comes from a new report by independent energy market analyst, Energy Quest, which uses new modelling to forecast that gas production in the southern states (NSW, Victoria, South Australia and Tasmania) starts to shortfall demand by 2022.

By 2025, the report forecasts that annual gas production offshore Victoria will more than halve from current levels, dropping to 146 petajoules (PJ) from 336 PJ in 2018.

Supply from Queensland would need to increase to nearly one-third of southern supply to fill the gap yet moving this volume of gas south would likely result in constraints on the QSN Link Pipeline and the Moomba Sydney Pipeline.

EnergyQuest warned, however, that more Queensland gas would only be a short-term solution to the problems in the south as Queensland has its challenges too.

EnergyQuest Chief Executive, Dr Graeme Bethune, expects Queensland gas production to start declining from 2025, due to a shortage of quality gas resources.

“The east coast faces a double whammy of insufficient gas in both the north and south,” Mr Bethune said.

“Queensland also has investment risks. Maximising production from Queensland’s coal seam gas (CSG) fields requires investors to be sufficiently confident of the investment climate to drill around 1,000 new wells a year at a total cost of AU$1-2 billion,” he commented.

Mr Bethune said that the investors in Arrow Energy (Shell and PetroChina) – Queensland’s largest uncontracted gas resource – need to be confident that development of their substantial acreage will be profitable, notwithstanding losing more than AU$6 billion on the investment since 2010.

“Investors already feel over-exposed to Australia and the Queensland CSG projects, which have cost them dearly. It would hardly be surprising if they are cautious about further investment but any pull-back on drilling or development could easily make the situation worse,” he said.

The report anticipates that an increasing reliance on Queensland gas will increase the wholesale price of gas delivered to Sydney or Melbourne into the $10-$13 a gigajoule (GJ) price range or higher, and for longer.

Lastly, the report details that the southern states will need a new permanent source of gas supply, which can only be met by LNG import projects.

Five projects have already been proposed, they include:

  • AGL’s proposed FSRU facility at Crib Point, near Melbourne.
  • A consortium of three partners (Squadron Energy led by Andrew Forrest, Marubeni Corporation and Jera Co Inc) have formed to develop an LNG import facility at Port Kembla.
  • ExxonMobil is reportedly considering to build an LNG import facility for Victoria by 2022, though few details are currently available.
  • Venice Energy is proposing a three-stage LNG project at Port Adelaide, starting with an FSRU followed by a 500 MW power station.
  • South Korean developer, EPIK, is proposing an FSRU for Newcastle. Planned capacity is 1.5 Mtpa at an expected cost of AU$430 million.

 

Dr Bethune said that timing is critical, and it is concerning that the regulatory processes in Victoria and NSW are dragging out and delaying decisions to go ahead with these new terminals.

“Here, we have investors willing to spend their own money to alleviate the east coast gas shortage but there does not appear to be any sense of urgency on expediting the approval process,” he commented.

Related Articles

Producing green LNG is key for Australia to remain competitive

Qatar awards stake in LNG expansion to TotalEnergies

GLNG

New $360 million investment by Santos will boost GLNG gas supply

LNG contracting off to a fast start in 2022 with more than 10 mmtpa signed

Woodside and BHP

To be ship shape Australia’s new fleet must be geared for gas

Comments

Leave a comment Cancel reply

You must be logged in to post a comment.

all news all projects

Latest Posts

  • Latest News
  • Latest Projects
16 Jun

Microfossils provide clues about Australia’s petroleum potential

15 Jun

AEMO makes unprecedented decision to suspend energy market

15 Jun

Wage rises to be felt, but lack of skilled workers a bigger issue

15 Jun

Sanctions weaken oil and gas construction pipeline in Eastern Europe

15 Jun

WA-designed offshore inspection system pushes frontier of robotics

17 Jun

Esso Australia starts technical tender for Bass Strait decommissioning

17 Jun

Study to check feasibility of turning Torrens Island into a hydrogen hub

17 Jun

AXP energy boosts production with low-cost well re-completion in the US

15 Jun

bp to lead and operate WA renewables and green hydrogen energy hub

15 Jun

Partners to develop offshore renewable green hydrogen production

Online Magazine

    Current Cover
  • Login
  • Subscribe

Subscribe

Subscribe to our newsletter or print magazine

Our Titles

  • Home
  • Contact Us
  • Terms and Conditions
  • Privacy
© Sage Media Group 2022 All Rights Reserved.
×
Authorization
  • Registration
 This feature has been disabled
 This feature has been disabled until further notice, however you may still register
×
Registration
  • Autorization
Register
* All fields required