Gas markets – a bridge too far?
Graeme Bethune A and Rick Wilkinson A BA EnergyQuest, Level 30, 91 King William Street, Adelaide, SA 5000, Australia.
B Corresponding author. Email: rwilkinson@energyquest.com.au
The APPEA Journal 59(2) 520-522 https://doi.org/10.1071/AJ18119
Accepted: 11 March 2019 Published: 17 June 2019
Abstract
The energy market is becoming more globalised and renewables are changing the supply and demand balance. Gas has been suggested as the bridging fuel to the new energy world – but is it a bridge too far? This presentation examines the global gas context and its impact on the Australian east coast gas markets, trends in energy supply options and sign posts for new directions. When the first liquefied natural gas (LNG) train started on Curtis Island, the gas producers had access to more than just the domestic market. The new overseas markets are also interconnected, so the Henry Hub, Brent oil and Chinese gas demand all have an influence on Australia’s east coast gas market. Potential LNG import terminals and net back pricing are changing the domestic gas market. The energy market is moving to renewables. This is not just an anomaly that will correct itself, but is based on lower renewable costs and distribution challenges. Moving relatively small amounts of energy long distances is a major challenge for Australia. Infrastructure, market hubs and sourcing strategies need to compensate for these challenges, and investment is needed to keep pace with the changes. Capital is a global commodity seeking the optimum return for the risk, but unconventionals, such as coal seam gas, are capital hungry. Government policies and support can be the key determinant for not only new investment but sustaining investment to meet existing gas supply contracts. Smart gas buyers will need to be agile and use deeper portfolio approaches for gas supply.
Keywords: gas demand, gas supply, infrastructure, LNG, LNG imports, reserves, resources.
Graeme Bethune is CEO of EnergyQuest, a company he established in 2005 to provide energy analysis and strategic advice on Australian oil and gas to companies and governments. Between 1995 and 2005 Graeme held senior executive positions with Santos, one of Australia’s leading energy companies, with responsibilities for finance, business development and investor relations. Graeme is the lead author of EnergyQuest EnergyQuarterly report and also its Monthly LNG Report. Graeme also undertakes regular consulting assignments on Australian and international oil and gas. He is regularly asked to speak at energy conferences in Australia and Asia, and his comments are sought by the domestic and international media. Graeme is Chairman of the Australian Gas Industry Trust, represents Australia on the Executive Committee of the International Gas Union (IGU) and is the IGU Regional Coordinator for North Asia and Australasia. Graeme has a First-Class Honours degree in Economics from Monash University and a PhD from the Australian National University. He has undertaken the executive program at the Graduate School of Business at Stanford University, is a Fellow of the Australian Institute of Energy and is a member of the US Society of Petroleum Engineers and the Petroleum Exploration Society of Australia. |
Rick Wilkinson has more than 30 years of experience in the oil and gas industry. He has held senior positions in the areas of commercial negotiation, LNG contracting, gas wholesaling and retailing, as well as technical field engineering. He joined the Australian Petroleum Production and Exploration Association (Australia’s peak upstream petroleum industry association) in 2010, where he held positions as Chief Technical Officer and Chief Operating Officer – Eastern Region. Rick held various positions with Santos for over 16 years, including President GLNG and Queensland, where he oversaw the initiation and definition for final investment of the A$16+ Billion CSG to LNG project, and Vice-President Commercial of Santos. He has been an Associate with management consultants McKinsey & Co. and held various managerial and engineering positions with Schlumberger in Iran, Iraq, Egypt, Sudan and the USA. Rick is an Adjunct Professor at the University of Queensland Centre for Coal Seam Gas and a Fellow of the Australian Institute of Co. Directors. He has a First-Class Honours degree, majoring in Nuclear Physics, at the Melbourne University and studied Geology and Petroleum Engineering at post-graduate levels. |
