Plans for future gas infrastructure and supply released
The 2021 National Gas Infrastructure Plan (NGIP) and the Future Gas Infrastructure Plan have been revealed by the Federal Government to outline a clear pathway for Australia’s gas supply and infrastructure up 2041.
The 2021 National Gas Infrastructure Plan (NGIP) and the Future Gas Infrastructure Plan have been revealed by the Federal Government to outline a clear pathway for Australia’s gas supply and infrastructure up 2041.
Outlining actions to ensure gas can be delivered at lower costs, the NGIP includes key findings focusing mainly on the east-coast gas demand and supply need. Specifically, the report presents a blueprint for east coast development over the next 20 years, with long-term goals for development of gas supply.
The report specifies the demand for gas in east coast market to the mid-2030s is predicted to be stable across all demand scenarios (‘Stable Demand’, ‘Grid Stability’ and ‘Low Demand’), with consumers and LNG exports contracts in favour of continued production.
The Future Infrastructure Investment Plan was released as complimentary to the 2021 NGIP, acting as the investment framework and focal point for the Federal Government.
The Investment Framework provides the specific targeted support required to accelerate the development of critical gas infrastructure projects.
Both these reports follow the Interim Report of the National Gas Infrastructure Plan which was made public in May 2021 and looked at priority infrastructure development that would assist in alleviating forecasted gas supply shortfalls.
“The Morrison Government is serious about gas and acknowledges the important role it plays supporting jobs, food production, manufacturing, industry, exports and energy supply,” said Angus Taylor, Minister for Industry, Energy and Emissions Reduction.
The Australian Pipelines and Gas Association has welcomed the releases, with Chief Executive Office Steve Davis responding, “Natural gas is a major source of energy to the Australian economy, it currently provides 27 per cent of end use energy which is more than electricity and second only to liquid fuels.”
“While gas is on a decarbonisation pathway as set out in Gas Vision 2050, demand for natural gas is not forecast to decline until well into the next decade, at which time we expect renewable, zero carbon gases such as hydrogen and biogas will be replacing it.” Said Mr Davis.
WA to secure domgas contracts with Woodside
The McGowan Government has announced the intention to secure domestic gas agreements from Woodside Petroleum and BHP’s newly sanctioned Scarborough project.
The McGowan Government has announced the intention to secure domestic gas agreements from Woodside Petroleum and BHP’s newly sanctioned Scarborough project, claiming the project will provide both local industry and community benefits.
An approximate 225 terajoules of gas per day is anticipated to flow into the domestic market as the noted development will include a second LNG train as well as new domestic facilities at Pluto.
"In the coming days, we will execute agreements with the Scarborough and Pluto Train 2 joint ventures that will provide energy certainty for the state and support thousands of local jobs, as well as providing a transition fuel source for our major trading partners," Premier Mark McGowan said.
"It's been estimated Scarborough and Pluto Train 2 will contribute $19 billion to the Australian economy through taxation and boost national gross domestic product by $125 billion to 2063," CME chief Paul Everingham said.
At the conclusion of 2020 the Australian Energy Market Operator gave warning that WA may face a large gas supply shortfall as early as 2029 unless there are new resources commercialised.
The best-case scenario, developed by the Gas Statement of Opportunities, forecast the market well supplied up until 2026, which notably, is the same year Scarborough gas is anticipated to come online.
Andrew Forrest, FMG chairman, has been previously outspoken towards Woodside pursing Scarborough, as he looks to move FMG into the use of green ammonia, electricity, and hydrogen with the goal of decarbonising his mining operations by 2030.
Woodside, BHP approve massive LNG project
Woodside and BHP have announcement their investment decision to move forward with the Scarborough to Pluto Train 2 project off the coast of WA.
Woodside and BHP have announcement their investment decision to move forward with the Scarborough to Pluto Train 2 project off the coast of WA.
The LNG development is worth $16 billion and will utilise gas from the Scarborough recourses processed at Woodside’s Pluto LNG facility on the Burrup Peninsula.
A scone LNG train will be constructed as part of the development at the Pluto site. ‘
The project is anticipated to create 3,200 jobs through the construction period, and once fully functional will support around 600 jobs.
To align with the WA Domestic Gas Policy the project will make gas equivalent to 15 per cent of its LNG exports available to domestic markets and consumers.
State Development, Jobs and Trade Minister, Roger Cook, said, “LNG can be used globally as a transition fuel to displace more carbon-intensive fuels such as coal and there is strong demand in international markets that have made commitments to net zero emissions.”
The development has been condemned by a number of groups including the Australasian Association for Corporate Responsibility, and environmental groups are anticipated to continue their push back and stance against the decision.
Fertiliser production ramps up
CSBP Fertiliser’s granulation plant started production in September, earlier than previous years to have products ready in advance before the next season.
CSBP Fertiliser’s granulation plant started production in September, earlier than previous years to have products ready in advance before the next season.
Distributions to the agricultural supply chain are anticipated to have further ongoing impacts on the production and availability of fertiliser into 2022.
It is well known the pricing of fertilisers globally have remained high relative to historical levels, directly reflecting the high international gas prices and lower internationally traded volumes. This is due to the reduced plant production in offshore markets, high commodity pricing and the export sanctions from key markets like China and Russia.
Consumer demands and commitments in WA, however, are currently ahead of the dame time in 2020.
Mark Scatena, CSBP Fertilisers general manager, noted this was a result of customers wanting to secure availability given the current risks to supply chains.
“CSBP has been working with growers to achieve supply certainty by capturing grower intentions through fertiliser forecasts for 2022 to understand the seasonal fertiliser requirement.” Mr Scatena said.
Rob Clayton, Nutrien Ag Solutions managing director explained it was inevitable that the agricultural supply chain issues were continuing to impact supply, adding, "This is due to a combination of strong global demand, export restrictions and caps in key export markets which have limited supply, placing pressure on already stressed supply chains."
Careful planning has been required for local fertiliser manufacturing companies as navigating international supply chains and tight domestic labour markets have providing challenging.
With continued market concerns looming over supply for next year several growers have indicated the intent to commit for next year and suppliers in WA have been cooperating with customers to provide as efficiently as possible.
AER examines gas pipelines, price regulations
The Australian Energy Regulator (AER) released the stakeholder informational paper examining the factors causing the downward pressure on the gas demand on the east coast.
The Australian Energy Regulator (AER) released the stakeholder informational paper examining the factors causing the downward pressure on the gas demand on the east coast.
The Regulating gas pipeline under certainty report views options for managing the potential pricing risks for consumers and acts as a catalyst for industry and stakeholder engagement to understand the regulations and uphold peace of change.
“It’s a timely information paper as the decarbonisation of Australia’s energy market ramps up, stranded asset risk is looming as the biggest threat to the gas industry,” said AER Chair Clare Savage.
The paper examines factors that appear likely to decrease demand for natural gas in both the medium and long term. The identified factors include possible government decarbonisation policies, increased competitiveness of electricity as a gas substitute, improvements in energy efficiency and increased renewable energy investment.
Stakeholders are encouraged to consider both the analysis and issues outlined and provide their views in the AER’s access arrangement review processes.
Transforming the oil and gas industry to embrace the energy transition
Baker Hughes is in the process of reposition itself to fill a pivotal role the low to zero carbon transition.
Baker Hughes is in the process of reposition itself to fill a pivotal role the low to zero carbon transition. Committed to reducing emissions is their own operations the company is seeking to help the industry be an integral part of the energy transition.
Two years ago, the company laid in the groundwork to map its path to carbon neutrality, before the pandemic hit and the oil process crashed serving as a wake-up call to the majority of the industry.
“We are one of the first in the oil and gas industry to make a net zero commitment, in line with the Paris Agreement,” said Graham Gillies, Baker Hughes Australia New Zealand and Papua New Guinea vice president. Baker Hughes aims to reduce its Scope 1 and 2 emissions by 50% by 2030 and reach net zero by 2050.
Understanding the need for the oil and gas sectors to decarbonise, Gillies noted that it would involve ensuring assets become both more efficient and productive, while also deploying existing emissions management technology. The company will also ensure a positioning for new ventures including carbon capture utilisation and storage and hydrogen.
The latest compression technology provided by Baker Hughe to Qatar Petroleum’s North Field East project will assist in reducing approximately 5 per cent of CO2 per year.
Notably, Baker Hughes is also working with NOVATEK, who it Russia’s largest independent natural gas producer with the aim of blending hydrogen into natural gas liquefaction which in turn will reduce carbon emissions from LNG facilities.
Gillies importantly note the company’s energy transition and carbon reduction was in the works and discussed with customers prior to the pandemic, but openly admitted it was harder to sell back then.
“The path to net zero takes a whole-of-society commitment and execution to achieve the emissions reduction goals. We are working with oil and gas operators, industry groups, and local governments to align to this common goal- to that we can enable energy transition together,” said Gillies.
WA Independent Power Association wants energy policy to support small business
There is increasing pressure on the McGowan Government to open the electricity market up to make pricing more competitive, as the State’s peak body for independent power providers claims business would benefit.
There is increasing pressure on the McGowan Government to open the electricity market up to make pricing more competitive, as the State’s peak body for independent power providers claims business would benefit from the support.
WA Independent Power Association chair Richard Harris claimed the issues of businesses being unable to access competitive electricity was widespread.
He explained that smaller businesses who are directly connected to the grid do not get a say in who they purchase their power from. The businesses who consume less than 50MWh each year must purchase electricity from Synergy.
“Customers who use 50MWh or more per annum are typically the larger, more energy intensive businesses such as supermarkets and manufacturers. It’s too high a margin and a totally arbitrary line put in the sand 15 years ago. We’ve always been suggesting anything above 20MWh should be open to competition,” Harris added.
Mr Harris explained that the WA gas market was de-regulated and noted that the electricity market was not far from it but “never quite made it.”
WA gas users fear supply crunch amid decarbonisation push
There are fears among a number of WA’s biggest mining and industrial companies that essential gas supplies could run short as industries move towards decarbonisation.
There are fears among a number of WA’s biggest mining and industrial companies that essential gas supplies could run short as industries move towards decarbonisation.
The DomGas Alliance, which represents the State’s largest gas consumers has commissioned Wood Mackenzie, a highly mining and energy consultancy, to report on the anticipated future demand of gas suppl in the states market.
Richard Harris, DomGas spokesman, said there is a belief as still has a role play, particularly in the transition to a carbon neutral world.
“But there’s also a point where gas, say 20 years out, becomes problematic because you’ll have other means of generating electricity such as hydrogen fuel cells, batteries and renewable energy,” he said.
“The report will help give everybody in the market a little bit more information about what the future looks like for WA,” he added.
The Alliance expressed concerns last years that WA could run short of gas this decade following the shelving of major LNG projects in the State’s north, which led to the McGowan Government banning the exportation of WA onshore gas.
Mr Harris said WA would need both Woodside’s Scarborough and Pluto 2 LNG projects to come online and onshore Waitsia and West Erregulla projects for there to be an adequate gas supply for the State.