Evaluating the sources and impact of new east coast gas supply
Daniel C. LevyRystad Energy, Level 24, Three International Towers, 300 Barangaroo Avenue, Sydney, NSW 2000, Australia. Email: daniel.levy@rystadenergy.com
The APPEA Journal 60(2) 464-467 https://doi.org/10.1071/AJ19041
Accepted: 24 February 2020 Published: 15 May 2020
Abstract
Rystad Energy has conducted a well level supply side study for the Australian east coast gas market, quantifying the widely expected supply shortfall and its timing. This paper presents these findings, along with an economic and technical evaluation of new sources of supply relief and their potential impacts on the market balance. The study suggests the east coast has adequate gas supply to meet demand until 2024, with an average excess of 73 billion cubic feet (Bcf) per annum over this period. However, in 2025 the market will shift to under-supply, starting at 93 Bcf in 2025 and increasing to over half a trillion cubic feet by 2030. Sufficient supply in the short term does not warrant complacency. With the average duration between discovery and first gas for the region being 7.1 years since 1990, even if new (traditional) supply is discovered in 2020, the market will still be undersupplied for at least 3 years. We have identified the four most likely sources of supply relief for the market, each with their own merits, difficulties and development timelines. These new sources include the Beetaloo Sub-basin shales of the Northern Territory, undeveloped coal seam gas acreage, electrifying liquefied natural gas (LNG) export facilities to preserve in-field usage, and finally, LNG importation. A combination of at least two of these sources is required to balance the east coast gas market to 2030. Of the options, LNG importation is the most viable to stave off undersupply in the medium term (3 to 7 years). While Beetaloo Sub-basin shale gas appears the most viable option for secure, long-term supply relief.
Keywords: Australia, Beetaloo, CBM, coal seam gas, CSG, electrification, imports, LNG, shale, west to east pipeline.
Daniel Levy has a MCom Finance (Excellence) and a BSc (double) in Geology and GIS and is Rystad Energy’s Head of Research for the Australasia region. He has 10 years’ experience working across both exploration and production research and operational roles. Prior to entering research, Daniel worked as an Operations Geologist, planning and executing drilling programs across the Surat, Bowen, Galilee, Bangemall and Beetaloo basins of Australia. Daniel has in-depth knowledge of the petroleum operating environment, having targeted shale, CSG, tight gas sands and conventional resource plays. In addition, Daniel has been involved in the preparation and marketing of several upstream assets as well as multiple joint venture operations with ASX200 companies. Daniel has applied his unique combination of Australian operational experience and strength in financial modelling to generate production and economic models for Australian and international research houses, focusing on asset economics for unconventional hydrocarbons and emerging plays in the Australasian region. |
References
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Rystad Energy (2019). Australian CSG assets to decline by 60% over the next 10 years. Rystad Energy, Oslo. Available at https://www.rystadenergy.com/newsevents/news/press-releases/australian-csg-assets-to-decline-by-60-percent-over-the-next-10-years/ [verified 2 March 2020].
