The Department of Industry, Science, Energy and Resources (DISER) has published the latest edition of its Resources and Energy Major Projects report.
The publication is an annual census of resources and energy projects in the development pipeline, and explores trends in exploration and project development.
The 2020 Resources and Energy Major Projects report outlines that over the 12 months from the start of November 2019 to the end of October 2020, the number of resources and energy major development projects increased by 19 per cent to 335 projects, and the value of projects in the investment pipeline increased by 4 per cent to $334 billion.
Of the 335 projects on this year’s list, around 105 were at the ‘publicly announced’ stage.
The value of the 105 projects at the publicly announced stage in October 2020 is estimated to be between $86 billion and $119 billion.
Around 38 per cent of these projects are in Western Australia alone, and are largely liquified natural gas (LNG)/gas projects or iron ore projects.
Queensland also had almost 30 per cent of projects, with the majority being coal projects.
DISER notes, however, that many projects at this stage remain uncertain and that many are unlikely to progress in the near term.
The value of projects at the ‘feasibility’ stage remained steady at an estimated $191 billion in the 12 months to October 2020.
The report highlighted that port, rail and pipeline infrastructure projects grew in Queensland, despite 13 projects regressing from the feasibility stage to publicly announced, and 19 other projects taking FIDs and moving to the committed stage on a national basis.
Over 160 projects are listed at the feasibility stage — approximately 50 per cent of the nation’s Major Projects list this year.
Coal projects account for 27 per cent of the number of projects at the feasibility stage, while LNG/gas/petroleum projects account for over 10 per cent. ‘Other commodities’ contributed 30 per cent.
The report outlined that weak oil and LNG prices this year resulted in the deferral of FIDs for several gas and LNG projects.
For example, an FID for Woodside’s Browse to North West Shelf project – the largest project on the list at over $30 billion – has been delayed from 2020 to 2023.
FIDs for Santos’ Barossa gas project (which looks likely to provide backfill for Darwin LNG), Shell’s Crux project (slated for backfill to the Prelude FLNG facility) and Woodside’s Scarborough to Pluto LNG project have all been delayed from 2020 to 2021.
The proposed Pluto LNG expansion (where a 5 mtpa train would be added) is the only substantial expansion to Australia’s LNG capacity currently in the investment pipeline.
Moreover, the value of projects at the ‘committed’ stage increased over the year to October 2020, from $30 billion to $39 billion.
Australia’s three largest export commodities — iron ore, coal and gas — account for just under 80 per cent of investment at this stage, although ‘other commodities’ has more than doubled from its low base.
Gas and LNG projects account for the largest share of committed projects by value. DISER outlines that despite challenging market conditions, three gas projects progressed to the committed stage in the 12 months to October 2020.
The first phase of Arrow Energy’s $10 billion Surat Gas Project was sanctioned in 2020. Gas from the project will be sold domestically and exported through the QCLNG plant at Gladstone.
Other gas projects new to the committed stage will also sustain production at existing LNG facilities: Julimar-Brunello Project Phase 2 will support LNG production at Wheatstone, and Greater Western Flank Phase-3 will support LNG production at North West Shelf.
Importantly, ‘committed’ and ‘completed’ resources projects are expected to create almost 20,000 construction jobs and more than 7,000 ongoing jobs.
The 2020 Resources and Energy Major Projects report is available on the Department of Industry, Science, Energy and Resources website.