LNG

June 3 (LNGJ) - Australian exploration and production company Metgasco and its partners have reported success in the drilling of the Odin-2 appraisal well in the South Australian Cooper Basin. “The well drilled to appraise the eastern flank of the Odin gas field encountered gas pay in the Toolachee, Epsilon and Patchawarra formations, the primary targets in the well,” said Metgasco.

   The Odin gas field is undergoing appraisal with gas produced being supplied to the Pelican Point Power joint venture of ENGIE Australia and Japan’s Mitsui under a long term contract running out in December 2026. “This successful drilling result at Odin-2 will enable the joint venture to progress with plans to rapidly tie-in the well to increase Odin gas production and associated revenue,” explained Metgasco Managing Director Ken Aitken.

Chevron Corp., the operator of the Gorgon LNG and Wheatstone LNG plants in Western Australia hit by industrial disruption, said it would apply to Australia’s labour regulator to help resolve its dispute with unions currently causing partial strikes.

May 3 (LNGJ) - Australian LNG operator Santos has signed four memoranda of understanding for the proposed storage of carbon-dioxide emissions from third parties to underpin the initial development of the Bayu-Undan carbon capture and storage (CCS) project in the Timor Sea, where front-end engineering design work is nearing completion.

   Santos said the accords for CO2 supply to Bayu-Undan CCS were signed by upstream gas and LNG projects offshore the Northern Territory and in Darwin and an energy and industrial group in Korea. “Bayu-Undan CCS has the potential to reduce the emissions and emissions intensity of Australian gas and LNG projects, as well as of other industries in the Northern Territory, by providing safe and permanent storage in depleted gas reservoirs that previously held gas and condensate in place for tens of millions of years,” Santos explained.

Australian liquefied natural gas plant operator Santos reported a decline in LNG sales income as production and Asia-Pacific prices fell and the Darwin plant continued to suffer feed-gas issues.

Australian ministers in the new Labor government are scheduled to meet in the coming week after the Australian Energy Market Operator triggered the Gas Supply Guarantee Mechanism for the first time since the measure was introduced in 2017 to secure domestic gas for power generators amid potential shortfalls in southern states.

New Prime Minister Anthony Albanese took office after his Labor Party defeated former PM Scott Morrison and his conservative Liberal-National coalition in the May 21 parliamentary elections.

Increased winter demand for energy, unscheduled outages at coal-fired power stations and gas shortages due to the war in Ukraine have led to soaring gas and electricity prices across Australia.

Energy Minister Chris Bowen said he would convene the meeting next week.

“After being sworn in I spent the morning being briefed by my department and by AEMO on the current situation on gas supply and the energy markets particularly in the East Coast,” said Bowen.

“I’ve also spoken his morning to the Treasurer and Energy Minister of New South Wales Matt Kean, to the Energy Minister of Victoria Lily D’Ambrosio, the Energy Minister of Queensland Mick de Brenni, the Energy Minister of Tasmania Guy Barnett, the Energy Minister of Western Australia Bill Johnston, and the Energy Minister of South Australia Tom Koutsantonis,” he explained.

“I’ve also briefed the Treasurer and the Resources Minister Madeleine King and the Industry Minister Ed Husic on the current situation,” he added.
There have been calls for the government to pull the gas trigger, known as the Australian Domestic Gas Reservation Mechanism, to divert exports and shore up domestic supply.

Gas price surge

Bowen said any use of the emergency mechanism wouldn’t impact gas prices in the short term.

“That’s a misunderstanding of how the mechanism works. It cannot come into force until January 1 next year,” he told reporters in the capital Canberra.

Bowen stated that he did not hold the former government accountable for any particular element of the crises Australia was facing.

“For the very serious situation we are facing. I do say this though: the former government’s nine years of denial and delay, their 23 energy policies, their ad hocery, their challenges in approaches have left Australia ill-prepared and our energy markets ill-prepared for the challenges we are facing today in relation to gas and energy supply,” he said.

“The previous government did not do the work necessary to increase renewables, to increase storage. If we had more storage and more renewables and better transmission, we would be much better placed to deal with the current challenges,” he added.

“And that’s, of course, exactly what our Powering Australia plan seeks to implement. But, of course, it will take some time to implement,” stated Bowen.

Opposition Leader Peter Dutton called the characterisation of the former conservative government’s policies as a “complete rewrite” of history.

“This government went to the election saying they had the answers and clearly they don’t. You look at Chris Bowen now, he is like the bunny in the headlights and he has no idea which way to go,” stated Dutton.

“This is nothing to do with renewables. I think the government has to take responsibility for what is a serious issue,” added Dutton.

“It seems to me that the inexperience of both Anthony Albanese (the new Prime Minister) and Chris Bowen is shining through. They have got the ability and the legislation there to deal with this and they don’t know what they should do,” stated Dutton.

The Australian Government says that Asian liquefied natural gas spot prices and oil-linked LNG contract prices are expected to remain high throughout 2022 and 2023 and would only decline back to non-crisis levels around 2027, depending on geopolitical events.

Woodside, the Australian LNG plant operator, has completed the sale of a 49 percent non-operating participating interest in the second Pluto LNG train under development to Global Infrastructure Partners (GIP), one of the world’s leading specialist energy infrastructure investors.

Australia, the world’s largest LNG exporter, plans to secure natural gas resources out to 2040 and beyond under a new energy plan to open up four new onshore Basins for the domestic market and to boost investment in new pipelines and infrastructure.

Australian engineering company Clough was awarded the contract for the second stage of development of the Waitsia natural gas field in onshore the Perth Basin of Western Australia and a future source of LNG exports.

Australian LNG plant operator Santos said it welcomed the New South Wales Independent Planning Commission (IPC) decision to give the go-ahead for its Narrabri Gas Project and thanked the local community for its strong support over many years.