Themed ‘New FroNTiers’, the Australian Petroleum Production & Exploration (APPEA) 2009 Conference and Exhibition held in Darwin, Northern Territory from 31 May to 3 June, was attended by upstream industry representatives from around Australia and overseas.

Over 1,600 attendees and over 100 exhibitors filled Darwin’s new Convention Centre. Under discussion were the benefits of natural gas for Australia’s economy, environment, and not least, the industry itself.

Great expectations

Releasing APPEA’s State of the Industry 2009 report, APPEA Chairman Eric Streitberg could boast about the industry’s achievements and its rosy future. The petroleum industry has $200 billion worth of projects on the drawing board that, if realised, could create 50,000 jobs, deliver $10 billion in government revenue each year and avoid 180 million tonnes (MMt) of global greenhouse gas emissions per annum.

Moreover, Mr Streitberg said the LNG industry could provide 20 per cent of global supply with the right policy settings – an 11 per cent increase on current supply.

Key targets highlighted in the report for the decade to 2017 are:

• Increasing LNG production from 20 MMt/a to at least 50 MMt/a
• Doubling natural gas use for industrial purposes and as a competitive feedstock
• Ensuring that 70 per cent of all new electricity generation installed is gas-fired.

Over the three days of the conference, high profile industry leaders and commentators from Australia and overseas addressed packed auditoriums, many confirming the industry’s potential both within state boundaries and in a global energy market.

LNG and major project development

Federal Minister for Resources and Energy Martin Ferguson, Northern Territory Chief Minister Paul Henderson and other industry leaders touted the industry’s role in Australia’s economic recovery.

Woodside Energy CEO and Managing Director Don Voelte and Chevron Managing Director Roy Krzywosinski confirmed the positive outlook for Australian LNG and the healthy competition within the market.

While Mr Voelte suggested the joint use of infrastructure to develop resources along Australia’s North West Shelf, Mr Krzywosinski spoke confidently about bringing the Gorgon and Wheatstone projects to fruition. Mr Ferguson showed his support for Gorgon, calling it a “one project economic stimulus package”.

The Kimberley LNG Hub was another major project discussed by the Minister that he said will and “secure the future economic and social empowerment of Indigenous communities in the Kimberley”

However, many executives and analysts noted the complex environment – regulatory, economically and logistically – in which these long term and technically complex projects have to get off the ground.

Another issue dominating the discussion on LNG were concerns about delivering to a gas hungry market that is expected to grow at a rate of approximately 7 per cent per annum through to 2020.

Meanwhile, Wood Mackenzie released a report supporting APPEA’s 2017 LNG capacity targets, expecting Australasian LNG capacity to double by 2017 to over 50 MMt/a with confidence in key projects on the drawing board.

Climate change

The natural gas industry’s contribution to reducing Australia’s greenhouse gas emissions was raised by many presenters.

Discussion ranged from local and global reductions in greenhouse gas emissions afforded by natural gas use, to carbon capture and storage opportunities, the need for the industry to be considered appropriately under an Emissions Trading Scheme (ETS) and innovative solutions to take the upstream industry into a cleaner future.

APPEA’s State of the Industry report highlighted many of the challenges ahead, including regulatory reform, ETS design and achieving a globally competitive fiscal regime.

APPEA CEO Belinda Robinson closed the conference, addressing its key themes, particularly energy security. Recognising the importance of assisting new emerging technologies, she said that securing supply is not about pitching one energy source against another. Nor is it about assistance that distorts “the very markets that are the key for fairly determining our future energy mix.

“The natural gas industry does not want handouts, it does not want subsidies. What we do seek is a level playing field.

It is difficult to see another industry that holds the key to this nation’s economic recovery as firmly as the Australian upstream oil and gas industry.”