Australia -rich in offshore oil and gas reserves- has seen major developments in its energy industry recently, with significant projects reaching milestones and more resources discovered in its waters.
Over the past few months, major developments in both oil and gas have taken place in Australia, while government and analyst forecasts see Australia’s energy exports further growing.
In the summer of 2018, Carnarvon Petroleum and Quadrant Energy announced a significant oil discovery off Western Australia—Dorado-1. In a follow-up announcing that more oil had been confirmed at the place, Carnarvon Petroleum’s Managing Director Adrian Cook described the discovery as “a truly incredible find.”
This was the biggest discovery of more than 50 million barrels in Western Australia since 2003, while the last discovery of more than 100 million barrels was in 1996, according to Wood Mackenzie, which expects the new exploration play to stoke interest in exploration off Western Australia.
Research firm Rystad Energy ranked Australia seventh among the top ten countries who were the oil and gas exploration winners for 2018, noting that the Dorado oil discovery was one of the largest discoveries ever in Australia’s North West Shelf. Dorado also made Rystad Energy’s list of the top 15 single largest conventional oil and gas discoveries for 2018.
Apart from oil resources and exploration, it was Australia’s gas resources and the launch of many liquefied natural gas (LNG) export projects that have been dominating the headlines in recent months and years—and rightly so.
France’s oil and gas major Total said in October 2018 that the first LNG cargo from the Ichthys LNG project left Darwin in the Northern Territory of Australia, after production had started up at the end of July. Total holds 30 percent in Ichthys LNG, whose operator is Japan’s INPEX with a 62.245-percent interest.
Ichthys LNG is planned to develop reserves of more than 3 billion barrels of oil equivalent located offshore Western Australia, including around 500 million barrels of condensate. Some 70 percent of the LNG produced by Ichthys LNG is scheduled to be supplied to Japanese customers, INPEX says, noting that the project will help meet growing energy demand in the region.
Later in 2018, it was the turn of Shell’s Prelude Floating Liquefied Natural Gas (FLNG) facility to start up production. Prelude entered start-up, ramp-up—the initial phase of production where gas and condensate is produced and is moved through the facility, Shell said on Christmas Day. Once this has concluded, the facility will be stabilised for reliable production of LPG and LNG, the oil and gas supermajor added.
Thanks to the ramp-ups at Ichthys LNG and Prelude FLNG, Australia will overtake Qatar to become the world’s biggest LNG exporter, Rystad Energy reckons. New capacity coming online from the United States and the ramp-ups in Australia will boost global LNG production by 11 percent in 2019 compared to 2018, the Norway-based energy research firm said.
Two gas field development projects offshore Australia, planned to either boost global LNG supply or natural gas supply on the domestic market, made progress late last year and early this year.
In February 2019, Shell’s Australian unit and its joint venture partners Seven Group Holdings Energy and Osaka Gas submitted a development plan to Australia’s National Offshore Petroleum Safety and Environmental Management Authority for the prospective development of the Crux gas field, which lies some 160 kilometres north-east of the Prelude field. The Crux project has been identified as the primary source of backfill gas supply to the Prelude FLNG. Front-end engineering and design for the project is expected to begin this year, while the partners currently target the financial investment decision (FID) to occur in 2020. It will take around four-five years from FID to the platform to be fully designed, constructed off-site, and towed to location, the partners say.
Another gas development offshore Australia by a major player reached FID in December 2018. ExxonMobil made a final investment decision to develop the West Barracouta gas field in Bass Strait in south-eastern Australia, aiming to bring new gas supplies to the Australian domestic market.
“Our objective is to produce West Barracouta gas for the Australian domestic gas market by 2021,” ExxonMobil Australia’s chairman Richard Owen said.
In the immediate future, Australia is set to boost its energy exports in 2018-2019, the Department of Industry, Innovation and Science said in its Resources and Energy Quarterly report in December. A weaker Australian dollar is set to help Australia’s resource and energy exports, and they are likely to hit in 2018-19 a new record high of AUS$264 billion (£145.6 billion / US$188.6 billion). Resource and energy commodities now represent more than half of Australia’s total export value. The latest forecast is an upward revision from previous estimates, due to robust growth in LNG and coal export earnings, the government said.
Australia’s LNG exports are expected to rise to 78 million tonnes in 2019–20 from 62 million tonnes in 2017–18, driven by the ramp up of the final two LNG projects in Australia’s recent wave of LNG investment, the report noted. The country’s petroleum exports are also seen rising, thanks to growing condensate production. New LNG-related condensate capacity is set to boost petroleum exports to 319,000 barrels a day (bpd) in 2019–20 from 226,000 bpd in 2017–18.
Commenting on the government report, the Australian Petroleum Production & Exploration Association (APPEA) noted that LNG exports were vital for sustaining Australia’s economic growth and for reducing emissions globally.
“Australia’s LNG projects will deliver decades of economic growth, jobs and exports. These national benefits aside, LNG exports have regional and global environmental benefits,” said APPEA Chief Executive, Dr Malcolm Roberts.
By Tsvetana Paraskova