EnergyQuarterly Report – June 2024

EnergyQuest has just released its June 2024 EnergyQuarterly report with comprehensive analysis and data for the March Quarter, 2024 together with comments and data of breaking news.

Time for a Plan B?

Five years ago, EnergyQuest published its East Coast Gas Outlook 2019. In that report we estimated that there would be a shortfall of gas supply against demand beginning in 2026, and that this would escalate in 2028. More recent reports from AEMO and the Australian Government’s Future Gas Strategy highlight this approaching shortfall.

It is now clear that whatever we have been doing, has not addressed the looming 2028 shortfall. But now we have less than four years to find the answer. Plan A of letting the market work its way through, or waiting for the market and governments to realise they really need more gas, has failed, and we have run out of time.

With four years to go, what are the options for Plan B?

  • Develop more gas. This is still a plan, but there are not many fields/discoveries that can be added in time
  • Back down gas demand faster
  • Divert gas from LNG feedstock
  • Contract LNG import terminal(s) 

It is likely that a Plan B, with only four years to go (and an even shorter-term risk of unexpected shortfalls) will require all of these options to be pursued. 

We explore some of these perspectives in this EnergyQuarterly.

Key Statistics

  • Total petroleum production started 2024 on a strong note, achieving a March quarter record of 279.3 MMboe, up 4.3% or 11.6 MMboe from the previous Q1 record in 2023. This latest result follows a decline in total production in 2023 that ended a nine-year streak of annual records off the back of the Liquefied natural gas (LNG) investment boom. The resilience in total production in Q1 2024 was due to Browse Basin producers (Ichthys and Prelude) and near-record performance by the east coast gas exporters.
  • Australia’s LNG industry started 2024 strongly with record March quarter production of 21.2 Mt, beating the previous best result of 20.5 Mt in Q1 2023. The record was achieved despite steadily declining shipments from the North West Shelf (NWS) and Darwin LNG, which is settling into a two-year stretch of zero exports until Barossa is brought online towards the end of next year.
  • National conventional gas production increased in Q1 2024 thanks to lift in output in WA that more than compensated for new record lows on the east coast. National production increased by 4.2 PJ qoq to 180.4 PJ.
  • West Australian production increased by 11.4 PJ qoq to 100.3 PJ, with higher output from John Brookes/Halyard/Spar, the NWS, and the Perth Basin more than offsetting the rapid demise of Reindeer.
  • East coast production decreased by 6.8 PJ to 71.9 PJ, led lower by the Gippsland Basin Joint Venture (GBJV) where production decreased by 24.8% qoq or 10.6 PJ to 32.2 PJ. GBJV accounted for only 45% of total east coast conventional production, down from 67% only 18 months ago.
  • Short-term east coast gas prices averaged $11.58/GJ in Q1, 7.5% higher qoq. Average WA spot prices published by gasTrading were 17% higher Q1 qoq at $9.13/GJ.
  • National oil production continued to decline in Q1 2024, decreasing 7.5% qoq to 6.8 MMbbl. This was despite the addition of 1.2 MMbbl to production in the latest quarter from restarts of Montara by Jadestone and Wandoo by Vancouver-based Vermillion Energy. The long-term decline of national oil production passed an historic milestone in Q1 2024 with the end of production from the Kingfish field by the Gippsland Basin Joint Venture.

Information about the EnergyQuarterly is available by clicking here.