EnergyQuarterly March 2019

The March 2019 EnergyQuarterly report has just been released, with comprehensive Australian oil and gas data for the December Quarter 2018 plus analysis of the latest developments. Here are some of the highlights:

  • Total Australian Proved and Probable (2P or P50) gas reserves as at February 2019 including both conventional gas, ethane and CSG were 109,504 PJ, a reduction of 6,204 PJ since December 2017. The reductions on the east coast were 3,617 PJ (-8%) after production of 1,837 PJ (i.e. reserves declined by 1,780 PJ in addition to production). In the west and north, reserves reduced by 2,586 PJ (-4%) after production of 2,845 PJ (i.e. 2P reserves were just replaced). 
  • Australian petroleum production in Q4 2018 crashed through an annual run rate of 1,000 MMboe. Total petroleum production climbed to 255.1 MMboe in Q4 2018, up 18.6% qoq. 
  • In Q4 WA domestic gas prices averaged $3.53/GJbelow the Henry Hub average of $4.95/GJ. 
  • In contrast, in Q4 the ABS index of east coast prices showed an increaseof 16.9% qoqShort-term Q4 prices averaged $10.01/GJ, 42.5% higher compared with prices a year earlier.
  • Australian LNG exports surged by 22.1% (12.5 Mt) from 56.5 million tonnes (Mt) in 2017 to a record 68.9 Mt in 2018, with Wheatstone (up 6.4 Mt) and Gorgon (up 4.2 Mt) the leading contributors to growth over the past year.
  • Quarterly LNG production climbed through 2018 to peak at 19.4 Mt in Q4 2018, up 26% qoq.
  • Higher LNG prices in 2018 resulted in Australian LNG export revenues growing at three times the rate of volume growth. Revenue jumped by 66% from $25.6 billion in 2017 to a record $43.4 billion in 2018.
  • Record CSG production in 2018 helped the CSG producers (mostly the LNG projects) to lift their contribution to east coast domestic gas supply from around 107 PJ in 2017 to 150 PJ in 2018.
  • Conventional gas supply on the east coast continues to fall at an alarming rate, with production in Q4 2018 down by 16.8% qoq to 101.4 PJ.
  • In terms of overall demand and supply, the east coast gas market was close to being balanced in Q4 due to higher prices and the resulting fall in gas-use for power. Gas used for LNG exports (including fuel gas) decreased by 7.9 PJ qoq. Taking account of the 11.0 PJ fall in production, total domestic supply fell by 3.1 PJ. With a fall in gas-use for power generation of 20.8 PJ there was an increase in other consumption of 8.2 PJ.
  • Australia is set for its biggest year in exploration since the collapse in oil prices, with a number of high-impact wells onshore and offshore that could have major implications for the east coast gas outlook.
  • Renewable energy is rapidly displacing gas in the NEM. Q4 saw the market share of gas in the NEM fall from 11.1% to 6.1% qoq. Capacity utilisation of gas generation ranged from only 9.0% in Victoria to 26.7% in South Australia. The market share of coal declined marginally qoq to 72.5%.
  • The total value of liquids production, including LPG, is estimated to have jumped from $4.9 billion in 2017 to $7.8 billion in 2018. Australian condensate production climbed strongly in 2018 to 65.2 MMbbl in 2018, an increase of 28.1% yoy.
  • Chevron completed 2018 as the clear leader of Australian petroleum production by company. Chevron production jumped by 69% yoy to 162.0 MMboe in 2018, overtaking Shell (up 11% yoy to 138.2 MMboe). The US supermajor overtook Shell on a quarterly basis at the beginning 2018 and extended its lead as all five trains across Gorgon and Wheatstone hit their stride.

Further infomation, including the brochure with full table of contents, can be obtained by clicking here.