CSG to LNG—a world first

Abstract

The last decade’s rise of coal seam gas (CSG) in Australia has been a phenomenon that has attracted global attention. CSG is now a firm part of Australia’s gas reserves base, representing more than half of east Australia’s proved and probable reserves.

The growth in unconventional gas is a trend that is already well established in North America where unconventional gas constitutes about 40% of the total gas market, displacing higher cost conventional gas.

Gas reserves in eastern Australia can now supply several decades of domestic demand, so an export LNG industry is an economically efficient way to develop a world-class resource. This development will establish Australia as the centre of a strong technical capability around CSG, with considerable direct economic benefits to the nation.

The increase in gas reserves located in a supply base close to energy-hungry Asian markets has already seen billions of dollars invested in LNG projects with CSG resources. CSG breaking plays and related acreage have been in high demand.

Santos’ GLNG project is set to become the world’s first to produce LNG from CSG on a large scale.

The complexity of taking CSG resources through a capital-intensive process to meet conservative buyer demand makes it a challenging endeavour. The CSG approach of developing a ‘statistical play’ using quick learnings and options can be at odds with a classical LNG project mindset, requiring a highly integrated approach across the value chain.

While there are challenges in establishing a world first CSG to LNG industry, the Australian gas industry has the experience and project skills to be a world leader in this breaking opportunity.