Gas production jumps in 2017: EnergyQuest

EnergyQuest CEO Dr Graeme Bethune.

EnergyQuest CEO Dr Graeme Bethune.

Surging production lifted total Australian natural gas output to a record 3,770 PJ in FY 2017, up 27 per cent from the previous year.

East coast LNG production and east coast domestic gas production both increased in the second quarter, up by 19.4 per cent to 5.0 MMt of LNG exports and by 11.9 per cent to 193.2 PJ of domestic gas.

Queensland CSG production, increased by 20 per cent to 333 PJ, and offshore Victorian production grew by 13 per cent to 110 PJ in the final quarter of FY 2017.

These estimates are contained in the just released September quarterly review by independent energy consultancy, EnergyQuest.

“East coast gas production is catching up with demand”, said EnergyQuest CEO Dr Graeme Bethune.

“Queensland is importing less gas to the point where it is increasingly self-sufficient.

“Even with the LNG plants, it is importing only about 2 PJ per month, or 1.4 per cent of the east coast supply and there has been a net flow of gas south from Queensland since the first week of June, for the first time since November 2015.

“However, New South Wales, South Australia and Tasmania are increasingly reliant on gas imports from Queensland and offshore Victoria.

“NSW imports around 10 PJ per month and even South Australia nearly 4 PJ.

Although there has been an increase in domestic gas supplies, east coast prices remain globally uncompetitive.

While on a comparable basis short-term east coast gas prices in Q2 were A$0.26-1.77 per gigajoule below Japanese import prices, Japanese prices are among the highest in the world, as are now east coast short-term prices and prices for new gas contracts.”

National petroleum production was a record 767 MMboe in FY 2017, up 19.5 per cent from the previous year, driven by surging LNG production, which climbed to 51.5 Mt in FY 2017, up by 38.7 per cent.

LNG exports were almost 2.5 times the volume of national domestic gas production, which was steady at 1,119 PJ.

FY 2017 marked a major shift in the petroleum industry as the LNG investment boom moved deeper into its production phase.

“The start-up of the Gorgon LNG project has also shaken up the order of Australia’s petroleum heavyweights,” said Dr Bethune.

“With production of 111 MMboe, Shell overtook Woodside (94 MMboe), BHP (90 MMboe) and Chevron (72 MMboe) to become Australia’s largest petroleum producer in FY 2017.

“The rankings will change again this year, with Chevron already up in second place on a quarterly basis.”

Plummeting national oil production was in sharp contrast to the rest of the petroleum industry. Oil production fell to 54.4 MMbbl, down 24.7 per cent compared to the previous year.

On current trends, oil will soon be eclipsed by condensate produced as a by-product of gas and LNG projects.

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