Coal seam gas to LNG – how has the industry developed and what next?
John Gibb A * , Anne Forbes A and Angus Rodger BA
B
John is a research director in Wood Mackenzie’s upstream Australasia Oil and Gas team. He provides analysis of economics, strategies and industry trends across the region. John joined Wood Mackenzie in late 2022. He is a successful oil and gas professional, with extensive business experience in Australia and internationally. John’s career includes 27 years working with Shell in various upstream and downstream roles. He started with Shell in the UK, and then spent 21 years working in the Middle East, South America, Russia and Australia in various operating and project roles. John graduated from the University of Edinburgh with a BSc degree and is a member of CIMA (ACMA). |
Anne is a senior research analyst in Wood Mackenzie’s Australasia upstream research team. Since joining in early 2022, she has worked on oil and gas assets and the domestic market balance across Australia. Prior to Wood Mackenzie Anne spent 8 years at Chemostrat in a technical geological role in the upstream industry. She specialised in stratigraphic analysis and has worked across Australia’s principal producing basins. She has a Bachelor’s and Master’s in Geology from the University of Cambridge, and a PhD in Volcanology from the Open University. |
Angus is Wood Mackenzie’s head of upstream analysis for Asia-Pacific and the Middle East. He has worked on Wood Mackenzie’s benchmark analysis of global pre-FID projects, deepwater, LNG, exploration and fiscal terms. Since joining Wood Mackenzie Angus has worked on a variety of upstream projects across Asia and Australasia. He has advised both national and independent oil companies on new business development including stranded gas monetisation, exploration strategy, regional basin screening and country-entry strategies. With a background in finance, research and journalism, he is accustomed to drawing on a wide range of information sources and quickly getting to the crux of an issue. He is a regular speaker at leading regional conferences and frequently provides insight on industry trends to leading news channels. Angus holds a BA Hons, Politics with International Relations from the University of Warwick. |
Abstract
Since the Queensland Curtis liquefied natural gas (QCLNG) project began exporting in 2015, coal seam gas (CSG) to LNG has significantly contributed to Australia’s economy and energy sector. Shell’s QCLNG was followed by Santos’s Gladstone LNG (GLNG) and the ConocoPhillips-led Australia Pacific LNG (APLNG). These three plants made up 28% of Australia’s LNG exports in 2023 with a combined volume of 23 mt, creating the world’s largest CSG production play. But the upstream landscape in Australia has moved significantly since these project final investment decisions (FIDs) were taken in the early 2010s. Domestic gas shortages on the east coast, along with related regulatory changes have changed market dynamics. Amendments to the safeguard mechanism have introduced additional cost and compliance obligations. Increased environmental activism and license to operate considerations are also playing an ever-increasing role in corporate decision making and future development planning. And finally, the costs and methods of developing CSG have evolved over this time. Around 10 years on from the commencement of production, this paper will review how the sector has developed and performed versus expectations. It will also analyse its future outlook. Key aspects include: field performance and reserves – how have the CSG areas tracked versus expectations at FID? How have costs and development concepts changed as industry has become more familiar with the nature of CSG? Future prospects – can CSG supply the east coast market as traditional heartlands decline? We investigate the future potential of the CSG plays in supplying both domestic and export markets, and the potential challenges and opportunities.
Keywords: Australia, coal seam gas, drilling, east coast, LNG, operating cost, Queensland, Taroom Trough, wells.
John is a research director in Wood Mackenzie’s upstream Australasia Oil and Gas team. He provides analysis of economics, strategies and industry trends across the region. John joined Wood Mackenzie in late 2022. He is a successful oil and gas professional, with extensive business experience in Australia and internationally. John’s career includes 27 years working with Shell in various upstream and downstream roles. He started with Shell in the UK, and then spent 21 years working in the Middle East, South America, Russia and Australia in various operating and project roles. John graduated from the University of Edinburgh with a BSc degree and is a member of CIMA (ACMA). |
Anne is a senior research analyst in Wood Mackenzie’s Australasia upstream research team. Since joining in early 2022, she has worked on oil and gas assets and the domestic market balance across Australia. Prior to Wood Mackenzie Anne spent 8 years at Chemostrat in a technical geological role in the upstream industry. She specialised in stratigraphic analysis and has worked across Australia’s principal producing basins. She has a Bachelor’s and Master’s in Geology from the University of Cambridge, and a PhD in Volcanology from the Open University. |
Angus is Wood Mackenzie’s head of upstream analysis for Asia-Pacific and the Middle East. He has worked on Wood Mackenzie’s benchmark analysis of global pre-FID projects, deepwater, LNG, exploration and fiscal terms. Since joining Wood Mackenzie Angus has worked on a variety of upstream projects across Asia and Australasia. He has advised both national and independent oil companies on new business development including stranded gas monetisation, exploration strategy, regional basin screening and country-entry strategies. With a background in finance, research and journalism, he is accustomed to drawing on a wide range of information sources and quickly getting to the crux of an issue. He is a regular speaker at leading regional conferences and frequently provides insight on industry trends to leading news channels. Angus holds a BA Hons, Politics with International Relations from the University of Warwick. |
