A third of Qld’s LNG industry at risk of closure by 2025: report

A third of Qld’s LNG industry at risk of closure by 2025: report

Never at full capacity

The three LNG ventures at Gladstone, Shell’s QCLNG project, Santos’s GLNG and Origin Energy’s Australia Pacific LNG, have a combined capacity of 25.3 million tonnes a year but have never run at full capacity as GLNG, in particular, has been unable to source economic gas supplies.

Industry analysts warned from the start that the three ventures were over-estimating reserves and needlessly duplicating expensive export equipment, advice that has gained in resonance as some coal seam gas fields have under-performed, whileshortages plagued the local east coast market.

Adelaide-based EnergyQuest found there was just not enough gas to supply the plants’ needs as well as meet the demands of the domestic east coast market. Dr Bethune said “emerging and critical” shortages were resulting from over-ambitious estimates of reserves.

The firm pointed to estimates by the Queensland government that proven and probable (2P) coal seam gas reserves in the state peaked in June 2015 at 42,733 petajoules, a number that had fallen to 35,074 PJ three years later even though the volume produced accounted for only half the difference. More than 4000 PJ of 2P reserves have had to be revised down.

EnergyQuest said dwindling production from gas fields in the south, including Esso-BHP’s Bass Strait venture, was likely to intensifypolitical pressures on the Queensland LNG exportersto divert gas to the domestic market.

The firm determined that the Queensland government’s recent award of acreage targeted for domestic gas supply to ventures including Senex Energy andSantos-Shellwouldn’t change the overall picture.

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