Page 5 - GLNG Week 20 2021

GLNG COMMENTARY GLNG

Queensland’s LNG
projects were built on
the assumption that
their coal-bed methane
projects would be more
productive than they
have been.

in winter 2023 under extreme conditions.” demand forecasts, as a result of a shift in the
These conditions include a 1-in-20-year max- political landscape over emissions regulations,
imum winter daily demand in Victoria, coin- the 2040 gap is too great for new domestic sup-
cident peaks across southern regions, power ply to hope to cover. While the federal govern-
system events significantly increasing gas-pow- ment may be inclined to force exporters to let
ered generation (GPG) of electricity, or gas pro- long-term supply contracts lapse in favour of
duction outages. the domestic market, the export industry has its
Squadron wants to bring the floating storage own supply woes to contend with.
and regasification unit (FSRU) based PKGT Local consultancy EnergyQuest released
project on stream before the end of 2022, sup- a new report on May 13 warning that the big-
plying up to 500 TJ (13 mcm) per day of gas. gest long-term threat to the Australian LNG
The project is the most advanced of the five pro- sector was insufficient feedstock supplies. In
posed import projects. discussing the challenges facing the sector,
AEMO has even said the delivery of the var- EnergyQuest dismissed the threat posed by
ious committed projects may even prevent a increased tensions between Australia and the
shortage from emerging until 2030. country’s largest LNG buyer, China.
It said: “Lack of gas for LNG projects is a big-
What next? ger threat to LNG exports than anything China The biggest
AEMO said that by the end of the decade the might do. In particular, production from the
country’s storage and PKGT’s annual limits on North West Shelf [NWS] is soon expected to long-term threat
permitted water discharge – around 130 PJ [3.39 start declining and the same is likely with some to the Australian
bcm] – would start to constrain supply. This of the Queensland projects later this decade.”
could result in an annual gas supply gap of up to Queensland’s LNG projects were built on the LNG sector was
30 PJ (781.46 mcm) in 2030. assumption that their coal-bed methane (CBM)
AEMO added: “Without additional supply projects would be more productive than they insufficient
from projects currently uncertain, or fuel substi- have been. Indeed, the government introduced
tution to soften gas consumption, these supply the Australian Domestic Gas Security Mecha- feedstock
gaps are projected to continue increasing from nism (ADGSM) in 2017 as a means to prevent supplies.
2030 onwards.” export projects from running at a deficit to the
By AEMO’s own projections, that supply gap local gas market.
is likely to widen to just shy of 1,500 PJ (39.07 If these projects do start to run out of gas
bcm) by 2040. It is a serious figure, one that will within the next 10 years, the Queensland gov-
require a greater dependence on import projects ernment will have to work with the industry
to cover. to source more gas in order to honour existing
While the general industry consensus appears term contracts. Brisbane may then find itself
to be that there is not enough domestic demand at odds with a federal government that will be
to justify more than one import project at pres- increasingly worried about limiting the coun-
ent, such a forecast suggests this will change. try’s growing exposure to the international
Ignoring possible changes to AEMO’s gas market.™

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