Australia’s gas markets: similar problems…similar solutions?
John Gibb A * , Angus Rodger B * and Lucy Cullen C *A
B
C
John Gibb is a research director in our upstream Australasia Oil & Gas team. He provides analysis of economics, strategies and industry trends across the region. John joined Wood Mackenzie in late 2022. He is a successful Oil & Gas professional with extensive business experience in Australia and internationally. John’s career includes 27 years working with Shell in various upstream and downstream roles. He started with Shell in the UK and then spent 21 years working in The Middle East, South America, Russia and Australia in various operating and project roles. John graduated from the University of Edinburgh with a BSc degree and is a member of CIMA (ACMA). |
Angus Rodger leads our benchmark analysis of global pre-FID delays and deep-water developments, including cost deflation and project evolution studies. Since joining Wood Mackenzie, Angus has worked on a variety of upstream projects across Asia and Australasia. An expert in deep-water analysis, he has advised both national and independent oil companies on new business development including stranded gas monetisation, exploration strategy, regional basin screening and country-entry strategies. With a background in finance, research and journalism, he is accustomed to drawing on a wide range of information sources and quickly getting to the crux of an issue. He is a regular speaker at leading regional conferences and frequently provides insight on industry trends to leading news channels. Angus holds a BA Hons, Politics with International Relations from the University of Warwick. |
Lucy Cullen is a Research Director based in Singapore. She is heavily involved in Wood Mackenzie’s global gas fundamentals and price forecasts, with primary responsibility for the Asia Pacific regional outlook and Australian domestic market analysis. Lucy joined the research team in Singapore in 2019. Her focus areas include supply-demand forecasts, market policy and contracting activity, and the role of gas in Asia Pacific’s energy transition. She is also a lead for Wood Mackenzie’s carbon offset LNG analysis. Lucy regularly presents to Wood Mackenzie’s global client base as well as industry conference audiences. She joined Wood Mackenzie in 2012 in the Energy Market research team. Lucy holds an M.A. with Honours in International Relations from the University of St Andrews, UK. |
Abstract
Declining supply and entrenched demand in all three of Australia’s domestic gas markets – the East Coast, Western Australia (WA) and the Northern Territory (NT) – is creating similar issues. We tend to think of these as essentially separate, disconnected and divided by vast swathes of land. But the reality is that scarce local supply has been sanctioned in all three markets – despite around 16 tcf being sanctioned for export as liquefied natural gas (LNG) – and domestic demand remains resilient, as per both Australian Energy Market Operator (AEMO) and Wood Mackenzie forecasts. Starting with the largest, the increasingly tight East Coast market continues to hit headlines as it deals with supply crises, government interventions and new regulations. Undersupplied, underinvested and underexplored, it is also divided by activism and state and federal politics. Traditionally more sedate, the WA market has slowly drifted in a similar direction. New forecasts highlighting potential gas shortages have sparked more state intervention in the market, including banning LNG exports by certain suppliers. The NT market might be the smallest, but it’s ahead of the curve, already experiencing emergency upstream shortages that sparked increased domestic supply from LNG exporters. While there is a less diverse range of supply sources in the NT, the answer to current shortages matches the options currently being looked at by regulators on both coasts.
Keywords: Australia, Bass, Beetaloo, Browse, carbon capture and storage, Carnarvon, CCS/CCUS, Cooper, corporate strategy, decarbonisation, deepwater, gas, Gippsland, offshore, onshore, Otway, Perth Basin, social licence, Surat, upstream.
John Gibb is a research director in our upstream Australasia Oil & Gas team. He provides analysis of economics, strategies and industry trends across the region. John joined Wood Mackenzie in late 2022. He is a successful Oil & Gas professional with extensive business experience in Australia and internationally. John’s career includes 27 years working with Shell in various upstream and downstream roles. He started with Shell in the UK and then spent 21 years working in The Middle East, South America, Russia and Australia in various operating and project roles. John graduated from the University of Edinburgh with a BSc degree and is a member of CIMA (ACMA). |
Angus Rodger leads our benchmark analysis of global pre-FID delays and deep-water developments, including cost deflation and project evolution studies. Since joining Wood Mackenzie, Angus has worked on a variety of upstream projects across Asia and Australasia. An expert in deep-water analysis, he has advised both national and independent oil companies on new business development including stranded gas monetisation, exploration strategy, regional basin screening and country-entry strategies. With a background in finance, research and journalism, he is accustomed to drawing on a wide range of information sources and quickly getting to the crux of an issue. He is a regular speaker at leading regional conferences and frequently provides insight on industry trends to leading news channels. Angus holds a BA Hons, Politics with International Relations from the University of Warwick. |
Lucy Cullen is a Research Director based in Singapore. She is heavily involved in Wood Mackenzie’s global gas fundamentals and price forecasts, with primary responsibility for the Asia Pacific regional outlook and Australian domestic market analysis. Lucy joined the research team in Singapore in 2019. Her focus areas include supply-demand forecasts, market policy and contracting activity, and the role of gas in Asia Pacific’s energy transition. She is also a lead for Wood Mackenzie’s carbon offset LNG analysis. Lucy regularly presents to Wood Mackenzie’s global client base as well as industry conference audiences. She joined Wood Mackenzie in 2012 in the Energy Market research team. Lucy holds an M.A. with Honours in International Relations from the University of St Andrews, UK. |
References
Australian Energy Producers (2024) Media Release: Federal Budget must target new gas supply to ease cost-of-living pressures. Press release 5 February 2024. Available at https://energyproducers.au/all_news/media-release-federal-budget-must-target-new-gas-supply-to-ease-cost-of-living-pressures/
