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.

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.

EASTERN AUSTRALIA'S GAS SUPPLY AND DEMAND BALANCE

2003 ◽  
Vol 43 (2) ◽  
pp. 137
Author(s):  
A. Dickson ◽  
K. Noble
Keyword(s):  
Natural Gas ◽  
Supply And Demand ◽  
Energy System ◽  
Infrastructure Investment ◽  
Modelling Framework ◽  
Eastern Australia ◽  
The Face ◽  
Level Building ◽  
Coal Seam Methane ◽  
Gas Supply

Concerns have been raised about the capacity for Australia’s natural gas supplies to keep pace with growing demand, particularly in eastern Australia. Specifically, it has been suggested that unless significant infrastructure investment is undertaken now the demand/supply balance situation in eastern Australia will deteriorate quickly as natural gas resources are depleted in the face of strongly growing demand.The purpose of this study is to examine whether and when supplies in eastern Australia are likely to fall short of growing demand.A modelling framework was developed by ABARE to examine these issues at a regional level, building on ABARE’s MARKAL model of the Australian energy system. The modelling framework includes representations of potential sources of natural gas and coal seam methane in Australia by basin, existing and proposed pipeline options and regional gas demands. A number of alternative supply side assumptions were also examined to evaluate their impact on the final results, including annual production rates from various basins and the availability of commercial and non-commercial reserves.

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.

Price review mechanisms in a global market

2011 ◽  
Vol 51 (2) ◽  
pp. 678
Author(s):  
David Thomas ◽  
Chris Douglas
Keyword(s):  
Review Process ◽  
Cost Effective ◽  
Global Market ◽  
Commercial Arbitration ◽  
Price Review ◽  
Gas Market ◽  
Gas Fields ◽  
Substantial Change ◽  
Gas Supply

The east Australian gas market (including SA) has, throughout its history, been isolated with limited connectivity from the gas fields that supply its major centres. With the arrival of CSG, imminent LNG exports and recent increased connectivity between gas fields and customers, the east Australian gas market has undergone substantial change. Against this background, it is timely to reconsider the approach to price review mechanisms contained in long-term gas supply agreements—particularly what market will be considered in any review process and what evidence will be available to the parties to a price review (in a cost-effective way) to allow consideration of movements in that market for the purposes of re-setting the price to be paid by a customer. In this extended abstract, the author discuss the effects of CSG developments and increased connectivity on the eastern gas market along with the effect LNG can have, particularly by reference to its impact on the WA gas market. A critical analysis of various price review mechanisms is undertaken with a view to identifying appropriate price review processes and criteria for the future along with reviewing the fundamentals of a price review process—specifically, the need for any price review and associated arbitration to give rise to a justiciable dispute such that the process attracts the operation of the relevant Commercial Arbitration Act and overriding Court supervision for the purposes of any necessary subpoenas or reviews of decisions.

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.

TARDIS: A COMPUTER MODEL TO PREDICT FUTURE GAS SUPPLY

1989 ◽  
Vol 29 (1) ◽  
pp. 41
Author(s):  
I.W. Northcott ◽  
R.C.M. McDonough
Keyword(s):  
Production Scheduling ◽  
South Australia ◽  
Field Size ◽  
Processing Plant ◽  
Mandatory Requirement ◽  
Liquid Products ◽  
On Line ◽  
Exploration Drilling ◽  
Gas Market ◽  
Gas Supply

Because much of South Australia's electricity is gas- generated the future supply of gas from the Cooper Basin is the central issue in the state's energy planning. Available proven reserves of gas are only sufficient to meet the state's demand until the early 1990s.The TARDIS computer program has therefore been written to enable production scheduling of proved and probable gas reserves and, by using historically derived discovery- rate algorithms, to calculate the exploration- drilling effort necessary to meet future gas supply requirements.The mandatory requirement was that the program should complete a simulation within several minutes. This necessitated the decomposition of complex engineering procedures to a simple level without unacceptable loss of accuracy.TARDIS simulates a network of discovered and undiscovered fields which may be allocated to four zones. The fields supply a defined gas market via a processing plant. Appraisal drilling in zones one and three converts estimates of possible gas- in- place into the proved and probable category after allowance for risk. Exploration drilling in zones two and four predicts the discovery of additional reserves using an algorithm, calibrated by historical data, based on the observation that field size decreases as cumulative drilling effort increases.Fields are scheduled in development priority and sufficient fields are brought on line to satisfy a defined gas market. The required number of on- line fields is determined by the cumulative field deliverability and the peak day gas demand. As each field comes on line development wells are drilled until the field is fully developed.A processing plant is simulated to produce sales gas which is within the required specification for chemical composition. The quantity of each of the ancillary gaseous and liquid products is also computed.Data entry and graphical display of results is processed with a spreadsheet and the program runs on a personal computer.TARDIS enables an assessment of whether the current and forecast drilling effort is likely to discover sufficient reserves to satisfy the market. It has proved an invaluable tool in investigating future gas- supply options for South Australia.

Implications of LNG exposure on the competitiveness of Australia

2016 ◽  
Vol 56 (2) ◽  
pp. 589
Author(s):  
Ross Lambie ◽  
Nicole Thomas ◽  
David Whitelaw
Keyword(s):  
Coal Seam ◽  
Gas Production ◽  
Fundamental Importance ◽  
Gas Flows ◽  
Coal Seam Gas ◽  
Market Outcomes ◽  
Spot Prices ◽  
Eastern Australia ◽  
Gas Market

Australia’s eastern gas market has historically been one of low prices and stable, long-term contracts. The development of coal seam gas (CSG) and the construction of Queensland’s three CSG to LNG projects is driving a tripling of gas production in eastern Australia and changes to historical patterns and directions of gas flows throughout the market. This transition from an isolated market to one linked to international LNG markets, coinciding with the unwinding of many legacy contracts, is leading to unprecedented change and will have profound effects on all participants. This extended abstract considers the implications of LNG exposure on the competitiveness of Australia’s eastern gas market. It will draw on the expertise of the gas market specialists in the Office of the Chief Economist, and the oligopolistic model of the market, to consider impacts on supply, demand, price, and the level of competition in various sectors of the market. One of the initial findings is that the volatility of global LNG spot prices is likely to have a significant impact on both gas production and demand in east Australia, given the scale of LNG exports relative to the eastern market. The extended abstract explores a range of LNG demand scenarios for the eastern gas market. It will emphasise the fundamental importance of expanded gas production on market outcomes, and the need for ongoing gas exploration and development to support the market through the transition.

Research on imbalance between supply and demand in China's natural gas market under the double-track price system

Energy Policy ◽  
2021 ◽  
Vol 155 ◽  
pp. 112380
Author(s):  
Jian Chai ◽  
Xiaokong Zhang ◽  
Quanying Lu ◽  
Xuejun Zhang ◽  
Yabo Wang
Keyword(s):  
Natural Gas ◽  
Supply And Demand ◽  
Price System ◽  
Natural Gas Market ◽  
Gas Market ◽  
Double Track

scholarly journals Hydrographic shifts south of Australia over the last deglaciation and possible interhemispheric linkages

2021 ◽  
pp. 1-12
Author(s):  
Matthias Moros ◽  
Patrick De Deckker ◽  
Kerstin Perner ◽  
Ulysses S. Ninnemann ◽  
Lukas Wacker ◽  
...  
Keyword(s):  
Southern Ocean ◽  
Southern Hemisphere ◽  
Critical Role ◽  
Temperature Response ◽  
South Australia ◽  
Last Deglaciation ◽  
Tight Coupling ◽  
Oceanic Fronts ◽  
The Last Deglaciation ◽  
Circumpolar Current

Abstract Northern and southern hemispheric influences—particularly changes in Southern Hemisphere westerly winds (SSW) and Southern Ocean ventilation—triggered the stepwise atmospheric CO2 increase that accompanied the last deglaciation. One approach for gaining potential insights into past changes in SWW/CO2 upwelling is to reconstruct the positions of the northern oceanic fronts associated with the Antarctic Circumpolar Current. Using two deep-sea cores located ~600 km apart off the southern coast of Australia, we detail oceanic changes from ~23 to 6 ka using foraminifer faunal and biomarker alkenone records. Our results indicate a tight coupling between hydrographic and related frontal displacements offshore South Australia (and by analogy, possibly the entire Southern Ocean) and Northern Hemisphere (NH) climate that may help confirm previous hypotheses that the westerlies play a critical role in modulating CO2 uptake and release from the Southern Ocean on millennial and potentially even centennial timescales. The intensity and extent of the northward displacements of the Subtropical Front following well-known NH cold events seem to decrease with progressing NH ice sheet deglaciation and parallel a weakening NH temperature response and amplitude of Intertropical Convergence Zone shifts. In addition, an exceptional poleward shift of Southern Hemisphere fronts occurs during the NH Heinrich Stadial 1. This event was likely facilitated by the NH ice maximum and acted as a coup-de-grâce for glacial ocean stratification and its high CO2 capacitance. Thus, through its influence on the global atmosphere and on ocean mixing, “excessive” NH glaciation could have triggered its own demise by facilitating the destratification of the glacial ocean CO2 state.

Sign in / Sign up

Export Citation Format

Share Document