East coast gas: resource potential at different gas price scenarios (Part 2: commercialisation of unconventional gas resources)
Joe Collins A B , Ian Cockerill A and Zain Rasheed AA RISC Advisory, Level 2, 1138 Hay Street, West Perth, 6005, Australia.
B Corresponding author. Email: joe.collins@riscadvisory.com
The APPEA Journal 59(2) 542-545 https://doi.org/10.1071/AJ18199
Accepted: 1 April 2019 Published: 17 June 2019
Abstract
Rising gas prices in the eastern Australian gas market, as well as forecast supply shortages in years to come, are driving speculation about LNG import requirements for the market. There are significant similarities with the gas market experience in the USA in the early 2000s which led to the construction of many LNG import terminals, the parallel rise of unconventional gas production and the subsequent mothballing of the LNG import facilities at huge economic cost. A comprehensive east coast gas market study has been carried out based on the 2P reserves positions for domestic gas producers. This data has been paired with a range of gas demand forecasts to identify the probable supply gap on the east coast over the next 10 years. A market response to the high gas pricing in the form of new developments is already underway. In a separate paper (Part 1) all potential domestic sources of unconventional gas to fill that gap were analysed to determine likely gas supply rates, development schedules and breakeven supply costs for each of the major demand centres. This paper (Part 2) illustrates the required gas prices to drive unconventional gas development in Australia, the subsequent scale of new unconventional gas supplies to the forecast gaps in the market and describes how those developments can reverse the trend of rising prices over time.
Keywords: breakeven cost of supply, coal seam gas, cost reductions, east coast gas market, gas market model, gas market supply shortages, gas price forecast, gas supply profiles, LNG imports.
Joe Collins is a Principal Consultant Development Engineer with RISC Advisory. Joe has 15 years of experience in process and facilities engineering. During his time at RISC he has participated in over 100 assignments including due diligence work, asset evaluations, reserves certifications and project reviews with clients located all over the world. He has in-depth skills in the areas of upstream facility capital and operational cost estimating, conceptual facilities design, well design and cost estimation, and project performance evaluation and forecasting. Joe has particular experience in reviewing and evaluating LNG projects and unconventional developments in Australia. Joe has a Bachelor of Oil & Gas Engineering (Petroleum and Process Engineering) from UWA (Australia) and is a Chartered Professional Engineer with Engineers Australia. Joe is a Member of the Society of Petroleum Engineers. |
Ian Cockerill is Head of Geoscience with RISC Advisory. Ian has 20 years of experience as a geoscientist with a successful record of value creation through oil and gas discoveries, new venture development, and asset/corporate promotion. He has a background in geological and geophysical interpretation with experience in conventional and unconventional exploration globally. Ian has worked in technical positions for Hunt Oil and Apache, and in executive positions for Transerv Energy, Verona Energy and TSV Montney. Ian has a BSc first class honours degree in Geological Sciences from Leeds University (UK) and an MSc in Basin Dynamics from Royal Holloway (University of London), UK. He is a member of PESA, AAPG, SEAPEX and CSPG. |
Zain Rasheed is a Development Engineer with RISC Advisory. Zain has a BEng (Honours) – Petroleum Engineering from Curtin University (Australia). Zain recently joined RISC as an Analyst in the Development Engineering Team. In his role he has worked on several projects involving both oil and gas assets, including technical advisements and reserve audits. During his thesis at university and at his most recent internship with Incremental Oil and Gas, Zain has gained experience using software including VBA, Python and the Kappa Ecrin Suite (Saphir/Topaz). |
References
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