Page 11 - AsianOil Week 13

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equivalent (boe) from existing operations in the Otway and Cooper basins. However, it has adjusted the overall makeup of that production to incorporate a higher share of gas. Cooper expects to produce around 5.9 petajoules (153.69mn cubic metres) of gas and 200,000 bar- rels of crude, but will update its guidance once Sole enters stable production.
Cooper said its capital expenditure was directed towards growth projects to increase the supply of locally produced gas to the south-east Australian market.
Meanwhile, leading Australian develop- ers Woodside Petroleum and Santos have
announced capex cuts and delays to growth projects as they seek to weather the low oil price environment.
Cooper noted that given the Australian Energy Market Operator’s (AEMO) previous predictions of an East Coast market gas sup- ply shortfall emerging in the next few years, reduced investment might exacerbate the sup- ply situation.
The company said: “It is probable a contrac- tion of capital expenditure by the broader oil and gas industry in response to lower oil prices may create an earlier and tighter gas supply outlook for this region than previously anticipated.”™
AEMO warns of gas supply shortfalls
POLICY
AUSTRALIA’S East Coast gas market is on track to experience natural gas shortages within the next five or so years, a new report by the Aus- tralian Energy Market Operator (AEMO) has warned.
Supply from existing and committed gas developments is expected to meet forecast East Coast demand until at least 2023, AEMO said in its latest Gas Statement of Opportunities (GSOO) report on March 27.
It said: “Gas production from only existing and committed gas developments is forecast to provide adequate supply to meet gas demand until between 2023 and 2025 depending on sce- nario, provided cargoes of export LNG above contracted levels are diverted to meet domestic demand if needed.”
The operator, however, warned that a slide in production from southern gas fields would require the development of either new produc- tion capacity or liquefied natural gas (LNG) import terminals to avoid supply shortfalls in southern states from 2024.
The report said: “Southern supply from exist- ing and committed gas developments will reduce by more than 35% (163 petajoules) [4.25bn cubic metres] over the next five years, despite an increase in committed gas developments in the past year.”
It noted that the development of anticipated gas field projects, which are not yet commit- ted, would improve resource adequacy until at
least 2026. However, final investment decisions (FIDs) for these projects face an uncertain future following the collapse of international oil and gas prices.
While local producers such as Beach Energy and Cooper Energy are upbeat about domestic-focused gas supply projects, changes on the international LNG market could have unexpected consequences for the local gas scene.
The GSOO said: “Global oil and gas demand trends may see LNG demand varying from expectations and indirectly impacting prices and availability of domestic supply and LNG imports. Impacts of the COVID-19 coronavi- rus (not modelled) may lead to decreased levels of global LNG demand and domestic gas con- sumption in the short term.”™
Week 13 02•April•2020 w w w . N E W S B A S E . c o m P11