Exploration needed to keep WA supplied wth gas

This story was originally published in The West Australian on 15 December 2017 with the headline "Explore more for gas: report." © Peter Milne.

The WA domestic gas market needs an exploration boost and more supply from the Gorgon project if it is to meet rising demand over the next 10 years, a report by the nation’s energy market operator warns.

The Australian Energy Market Operator’s WA Gas Statement of Opportunities report yesterday said there would be less gas early next decade from the State’s biggest producer, the North West Shelf, as its legacy gas supply contracts expired.

Gas supplies would be further constricted by the wind-down of other projects serving the domestic market because of depleted reserves.

BHP Billiton’s Macedon and Quadrant Energy’s Varanus Island and Devil Creek plants are the principal domestic-only suppliers, with most other supply coming from LNG projects with domestic gas obligations.

AEMO forecast that the tighter demand would lift average gas prices at the plant gate by 46 per cent over the next decade, encouraging more exploration to find additional reserves.

However, the report noted a conventional gas field could take up to five years to develop after discovery. This presented a risk that it may already be too late to avoid a shortfall in supply.

The WA spokesman for the Australian Petroleum Production and Exploration Association, Stedman Ellis, said exploration for unconventional shale gas had stopped in WA because of the State Government’s moratorium on hydraulic fracturing. “It makes no sense to continue to lock away a potentially massive resource,” he said.

The report also noted that the Gorgon domestic gas plant was producing 155 terajoules a day but could supply up to 300TJ/d.