EnergyQuest has released a new, confidential study, Australian Coal Seam Gas 2013: All Aboard the LNG Train.
Some of the key findings include:
- Upstream there is little activity outside the CSG LNG projects and certainly no discoveries of new “sweet spots”. If anything CSG exploration acreage appears to be shrinking.
- For the LNG projects, the biggest challenges are issues like flooding, transport and accommodation. However costs post first LNG appear to be higher than we had expected.
- The report also puts the projects into the global LNG context, where the interest of developers and buyers for new projects has clearly moved to other countries rather than expansion at Gladstone. I will get further perspectives on this at the LNG 17 Conference in Houston next week.
- Increasingly the Cooper Basin is supplying the LNG projects as well as domestic gas. The report assesses the future production potential of the Basin for both conventional and unconventional gas, which appears promising. This work has been done by Denis Dare, a former senior Santos executive and former Principal Adviser at Gaffney Cline.
- Denis has also assessed the production potential of NSW CSG and the likelihood or not of development. Denis’s work has confirmed that NSW has considerable production potential but has significant political barriers.
- The report also has a detailed assessment of the outlook for domestic gas demand, supply and prices. One of the critical demand issues is the demand for gas-fired power generation in the context of higher gas prices and low carbon prices. This is being modelled for us by Greg Thorpe of Oakley Greenwood using their electricity market model.
In total the report provides an extremely thorough assessment of the status and outlook for east coast Australian LNG and domestic gas. Please download the flyer if you would like to find out more.