LNG

Australia’s left-wing government has rowed back from starting to ban hydrocarbons and putting the nation on a path to economic and energy suicide by on July 23 deciding to issue exploration and production licences for natural gas for the East, Southeast and West coast markets.

June 13 (LNGJ) - Beach Energy, the Australian exploration and production company and recent LNG player, has successfully connected the Enterprise natural gas field located just offshore Port Campbell in the state of Victoria to the Otway Gas Plant, with first sales gas delivered on June 12, 2024.

   Beach signed a Gas Sales Agreement (GSA) to supply utility company Origin Energy with gas from the Enterprise field until the end of 2026. “First gas from the Enterprise field is a significant milestone in Beach’s target of delivering a material increase in production and free cash flow over the next 12 months,” said Chief Executive Brett Woods, whose company also has a stake in the gas and LNG project onshore the Perth Basin in Western Australia.

Santos Chief Executive Kevin Gallagher told the Australian Petroleum Production and Exploration Association conference in Adelaide that Australia would soon be taking emissions from natural gas production and heavy industries as a world leader in carbon management services.

POSCO International, the energy unit of the South Korean steel-producing and industrial group, has joined with Indonesian state-owned oil and gas company PT Pertamina to win the exploration and production licence for the Bunga gas block offshore Java as Korea's LNG import facilities are expanding.

“A consortium involving POSCO International and Indonesian state-owned PT Pertamina Hulu Energy (PHE) obtained the rights from the Indonesian government to explore the Bunga natural gas block off the eastern Java Island,” said POSCO in a statement.

The two will each own a 50 percent stake in the project and POSCO International will be the operator.

POSCO explained that the award followed a joint study of the 8,500 square kilometres Bunga block with Pertamina Hulu Energi, a 100 percent subsidiary of Pertamina.

The Korean company is expected to direct any natural gas resources to possible LNG export possibilities.

Imports

POSCO International, which was newly branded as a company after the merger with POSCO Energy, noted that it is the only energy company in Korea that has an LNG value chain from exploration to production, storage and power generation.

It also has natural gas interests in Myanmar and Australia and has been carrying out gas exploration offshore Malaysia since 2021.

POSCO has firm plans to increase LNG imports and held a ground-breaking ceremony at the end of January 2023 for a planned new import facility near the site of the existing Gwangyang facility in South Jeolla province.

The company plans to invest 930 billion Korean won ($757 million) to build the terminal with two LNG storage tanks, each with 200,000 cubic metres capacity, to provide power for the steel mills and more electricity for the region.

In addition to the existing Gwangyang terminal, Korea has six other facilities at Boryeong, Incheon, Jeju, Pyeongtaek, Samcheok and Tong-Yeong.

POSCO said it regarded the new terminal as “another growth engine for Korean industry at Gwangyang” where the first LNG facility started operations in 2005.

BW Offshore is making progress on the Barossa natural gas floating production, storage and offloading (FPSO) project for the Timor Sea as part of plans to prolong the lifespan of the Australian Darwin LNG export plant.

Beach Energy, the Australian exploration and production company set to become the nation’s newest LNG exporter in 2023, has completed its Otway Basin drilling campaign offshore South Australia and Victoria to boost domestic supplies.

Australia is undergoing an East Coast electricity generating problem that has caused panic in the new left-wing Labor government rather than a full-blown domestic natural gas supply crisis.

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.

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.

A Western Australian mining company targeting one of the largest known remaining global resources of premium ore called kaolin has advanced towards the start-up of its project by signing a 15-year agreement for the supply of liquefied natural gas for power and fuel.