Page 14 - AsianOil Week 20 2021

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Image: AEMO
This year, however, AEMO’s message was By AEMO’s own projections, that supply gap
noticeably different. The regulator said in its Gas is likely to widen to just shy of 1,500 PJ (39.07
Statement of Opportunities (GSOO) report, bcm) by 2040. It is a serious figure, one that will
which was published on March 29, that should require a greater dependence on import projects
just one of the five import terminals planned to cover.
for the East Coast come to fruition in the next While the general industry consensus
two years, then a supply shortfall would likely be appears to be that there is not enough domes-
postponed until at least 2026. tic demand to justify more than one import
AEMO said this was a very achievable project at present, such a forecast suggests this
outcome as long as committed field devel- will change.
opments, pipeline expansions and Squadron Ignoring possible changes to AEMO’s
Energy’s Port Kembla Gas Terminal (PKGT) demand forecasts, as a result of a shift in the
proceeded as planned. Squadron is develop- political landscape over emissions regulations,
ing the import project at the titular New South the 2040 gap is too great for new domestic sup-
Wales port. ply to hope to cover. While the federal govern-
The market operator noted: “If these com- ment may be inclined to force exporters to let
mitted projects are not delivered to schedule, long-term supply contracts lapse in favour of the
greater reliance would be placed on storages, domestic market, the export industry has its own
and gas shortfalls of up to 100 TJ [2.6mn cubic supply woes to contend with.
metres] per day may eventuate in winter 2023 Local consultancy EnergyQuest released a
under extreme conditions.” new report on May 13 warning that the biggest
These conditions include a 1-in-20-year long-term threat to the Australian LNG sector
maximum winter daily demand in Victoria, was insufficient feedstock supplies. In discussing
coincident peaks across southern regions, power the challenges facing the sector, EnergyQuest
system events significantly increasing gas-pow- dismissed the threat posed by increased tensions
ered generation (GPG) of electricity, or gas pro- between Australia and the country’s largest LNG
duction outages. buyer, China.
Squadron wants to bring the floating stor- It said: “Lack of gas for LNG projects is a big-
age and regasification unit (FSRU) based ger threat to LNG exports than anything China
PKGT project on stream before the end of might do. In particular, production from the
2022, supplying up to 500 TJ (13 mcm) per day North West Shelf [NWS] is soon expected to
of gas. The project is the most advanced of the start declining and the same is likely with some
five proposed import projects. of the Queensland projects later this decade.”
AEMO has even said the delivery of the var- Queensland’s LNG projects were built on the
ious committed projects may even prevent a assumption that their coal-bed methane (CBM)
shortage from emerging until 2030. projects would be more productive than they
have been. Indeed, the government introduced
What next the Australian Domestic Gas Security Mecha-
AEMO said that by the end of the decade the nism (ADGSM) in 2017 as a means to prevent
country’s storage and PKGT’s annual limits on export projects from running at a deficit to the
permitted water discharge – around 130 PJ [3.39 local gas market.
bcm] – would start to constrain supply. This If these projects do start to run out of gas
could result in an annual gas supply gap of up to within the next 10 years, the Queensland gov-
30 PJ (781.46 mcm) in 2030. ernment will have to work with the industry to
AEMO added: “Without additional supply source more gas in order to honour existing term
from projects currently uncertain, or fuel sub- contracts. Brisbane may then find itself at odds
stitution to soften gas consumption, these supply with a federal government that will be increas-
gaps are projected to continue increasing from ingly worried about limiting the country’s grow-
2030 onwards.” ing exposure to the international gas market.™

P14 www. NEWSBASE .com Week 20 20•May•2021