Principal Advisor Martin Wilkes tells ENP Vic ban could open LNG imports door

Vic ban could open LNG imports door: RISC
Thursday 1, September 2016

VICTORIA locking the gate to gas exploration could strengthen the case for LNG imports into eastern Australia, RISC Advisory has told Energy News.
Though it may conjure up images of ‘carrying coal to Newcastle’ or ‘selling ice to eskimos’, the idea of importing LNG into the eastern states may not be as crazy as it sounds given recent decisions in the eastern states and political moves further north.

On Tuesday, Victoria’s Labor government decided to permanently ban hydraulic fracturing and unconventional gas extraction and extended the moratorium on the exploration and development of even conventional onshore gas until 2020.

The move follows Northern Territory Labor leader Michael Gunner being sworn in yesterday as the new Chief Minister – the first born inside the NT – after his party ousted Adam Giles’ besieged but pro-fraccing Country Liberal government in the August 27 election.

Gunner’s victory was more bad news for the oil and gas sector as he’s also promised a moratorium on fraccing, as has his party’s Western Australian branch ahead of the next state election due next March.

While there are varying forecasts on WA’s security of supply – although stopping fraccing could halt key onshore projects that are providing some hope – Victoria’s looming gas shortage is considered a certainty.

WA Labor delegates voted at their state conference last September to change the party’s platform on unconventional gas to ban exploration until yet another inquiry is held to ensure it does not affect groundwater, public health or contribute to climate change.

While WA is disconnected from the east coast pipeline network, a ban on fraccing in the NT would seriously jeopardise assessment of its significant shale gas potential.

RISC’s Perth-based principal Martin Wilkes said the Northern Gas Pipeline, being developed between the Amadeus Basin in the NT and Mt Isa in Queensland, would “at best” deliver about 100 terajoules per day of gas into the eastern states’ main gas markets, which are over 2000km away.

“This is only equivalent to about 5% of the eastern states supply needs, and is unlikely to have significant impact,” Wilkes said.

“A well-positioned LNG import facility could supply more than 500TJpd, 25% of the market requirements, directly into the markets.”

This analysis could prove prescient given the mystery surrounding exactly where the NGP’s gas will be sourced from, particularly in light of Gunner’s win.

As Deloitte analysts Geoffrey Cann and Andrew Slaughter pointed out at an LNG18 breakfast the firm hosted in Perth earlier this year, it’s not without precedent in other countries to both import and export LNG.

Cann said building an LNG receiving terminal in Sydney was “certainly not inconceivable”.

Similarly, Indonesia and Malaysia are already both exporters and importers of LNG, and both Dubai and Kuwait import LNG even though they are within 1000km of Qatar, currently the world’s biggest supplier of LNG, but soon to be toppled by Australia.

RISC first raised this as a potentially more practical approach for the eastern states more than two years ago when the North Eastern Gas Interconnector pipeline (now the NGP) was first touted as the panacea to the eastern states’ gas supply problems.

“It’s also worth noting that 11 of the last 14 LNG import facilities built worldwide – including Dubai and Kuwait – have been based on floating storage regasification units,” Wilkes said.

“Why? Because they are cheaper, faster to build and install and have significantly less environmental impact than a conventional land based import facility.

“Typically an FSRU import facility can be delivered within 18 months of the decision to proceed – providing that approvals can be obtained.”

Ti view the original article, please click here.

Back to previous page
Contact Us

Contact us and one of our team members will get back to you as soon as we can.

Contact Us