The September 2019 EnergyQuarterly report has just been released, with comprehensive Australian oil and gas data for the June Quarter 2019 plus analysis of the latest developments.
A recurring theme through the report is the changing locus of energy within Australia. The cheapest electricity and gas can be found in Western Australia and Queensland rather than the southern states. Domestic gas in Western Australia is comparable in price to Henry Hub. This is partly due to the WA domestic gas reservation policy but also due to successful exploration that has found numerous domestic gas fields both offshore and onshore. The latest exciting development is Strike Energy’s West Erregulla discovery in the onshore Perth Basin, within 300 km of Perth. The Perth Basin was believed to be mature but this has been proved wrong with the Waitsia and West Erregulla discoveries. This is not small stuff. Waitsia is 820 PJ and the pre-drill estimate for West Erregulla was 966 PJ. Who knows how much gas might be found within 300 km of Sydney and Melbourne if only companies were able to explore? Otherwise manufacturing will move where the energy is cheaper.
Here are some of the other highlights:
Australian LNG exports were 23% of the global market January to August. The US was 10%.
After seven consecutive quarters of increase, the Australian average LNG price dropped sharply from A$13.42/GJ in Q1 2019 to A$10.64 in Q2 2019.
Western Australia domestic gas production in Q2 was 106 PJ. This is a quarterly record and in excess of 97 PJ of consumption, with the surplus flowing into storage. Unlike the case on the east coast, WA is experiencing a surfeit of domestic gas. Woodside’s average realised Western Australian domestic gas price in Q2 was $3.41/GJ.
Domestic gas consumption on the east coast in Q2 2019 was at its lowest Q2 levels for at least 10 years.
Queensland exported gas to the southern states in Q2, in line with seasonal patterns but at a higher rate than in previous years.
Average east coast short-term gas prices in Q2 were all higher than 12 months previously. However, the market shifted in July. Queensland short-term domestic gas prices in July were lower compared to those in June.
South Australia had the highest concentration of renewables (wind and solar) in Q2 (48%), followed by Victoria (15%) and Tasmania (12%). NEM generation in Q2 was flat. Coal declined by 4%, gas was flat and renewables grew by 41%.
Further infomation, including the brochure with full table of contents, can be obtained by clicking here.