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Australia commits to gas reserve scheme
AUSTRALIA
AUSTRALIAN Federal Resources Minister Matt Canavansaidlastweekthatthegovernmentwas ready to implement a national gas reservation scheme in order to lower prices on the east coast.
Canavan said on December 5 that the east coast gas market’s largest reported quarterly gas surplus since liquefied natural gas (LNG) exports from Queensland began in January 2015 was the result of the Coalition government’s policies. These include the introduction of the Australian Domestic Gas Security Mechanism (ADGSM) in July 2017, which gives the government the power to limit exports from LNG projects that run in deficit to the local market.
Consultancy EnergyQuest said in its Decem- ber report that gas production on the east coast had climbed to 500.1 petajoules (13.03bn cubic metres) in the third quarter. It noted that while LNG exports had increased by 9.1 PJ (237.04mn cubic metres), the market still enjoyed a sur- plus of 17 PJ (442.83 mcm). This compares with a deficit of 17.9 PJ (466.27 mcm) in the corre- sponding period of 2018.
Acknowledging industry’s mounting frustra- tion over stubbornly high gas prices, the minister said he was “focused on keeping gas prices down
so we have a vibrant manufacturing and process- ingsectorinruralandregionalareas”.
He said: “[Western Australia] has shown that a successful LNG export industry can sur- vive and thrive with a gas reservation policy. I will ensure that gas is available and affordable for industry on the east coast as well and will work with states and the Northern Territory and industry to implement a national gas reservation scheme.”
WA’s gas reserve policy ringfences 15% of production from export projects for the local market and has been in place for many years.
EnergyQuest said short-term east coast gas prices had averaged AUD8.23 ($5.65) per giga- joule in the quarter, down 7.8% year on year and 13.1% quarter on quarter.
Canavan also took the opportunity to criti- cise the local government in Victoria, which has banned all onshore exploration in the state.
“The Andrews government seems intent on shutting down industries, from vegetable proces- sors to aluminium smelters operating in regional areas of Victoria while they pander to green activists and Greens in inner city Melbourne,” said Canavan.™
GAS SUPPLY
Senex expands gas supply deal with Orora
AUSTRALIA
AUSTRALIAN independent Senex Energy has expanded its natural gas sales agreement with Queensland-based Orora, agreeing to supply the manufacturer with 13.2 petajoules (343.84mn cubic metres) of gas from Project Atlas.
Senex signed an initial two-year sales agree- ment with Orora for the supply of 3.3 PJ (85.96 mcm) of gas from January 1, 2020.
Senex said on December 11 that under the expanded agreement it would supply an additional 9.9 PJ (25.79 mcm) of gas from the 58-square km Project Atlas over six years from 2022. The gas will be supplied at the Wallumbilla gas hub in Queensland, with Senex noting that it would be sold at a market price that would climb in line with the consumer price index (CPI).
Senex managing director and CEO Ian Davies said: “Expansion of the gas sales agree- ment is a further seal of approval for Project Atlas as we continue to de-risk the asset’s future revenuestream.”Headdedthatthecompanywas continuing to negotiate contracts for the rest of the production from the block, which is located near Miles and Wandoan.
The news came a day after Senex revealed that the project had delivered its first sales gas ahead of schedule. The company has begun supplying gas to Queensland government-owned power
generator CleanCo, with Senex noting that it has the right to sell initial quantities of gas until June 30, 2020. The company said it was selling the gas via Wallumbilla at a fixed-price basis in line with current market levels.
Commenting on the deal, Davies said: “With the support of the Queensland government, Senex has successfully delivered this devel- opment within 18 months of [the granting] of the petroleum lease. We have achieved this on budget and ahead of schedule, allowing early gas sales to be made to one of our foundation cus- tomers, CleanCo.”
Davies added: “With the processing facility delivering gas, we are focused on completing the initial ~60 well drilling campaign by mid-2020 and ramping up production to an initial plateau of 12 PJ [312.58 mcm] per year by the end of [financial year 2020-2021].”
The production facility has five trains, of whichonlytwoareonlineatpresent,andapeak production capacity of 15 PJ (390.73 mcm) per year. Senex has drilled 23 wells of its initial campaign, with 15 wells producing more than 3 terajoules (78,145 cubic metres) per day. Output will be ramped up over the next 12 to 18 months. Project Atlas has 144 PJ (3.75bn cubic metres) of proven and probable reserves.™
Week 50 18•December•2019 w w w . N E W S B A S E . c o m P7