More Gas Needs to Be Developed by 2019 to Meet East Australian Demand
A report published Thursday by Australian Energy Market Operator (AEMO) has stated that gas reserve development is required by 2019 to maintain long-term gas supply adequacy in eastern and southeastern Australia.
AEMO’s 2016 Gas Statement of Opportunities (GSOO) shows that developed gas reserves in eastern and southeastern Australia are only sufficient to meet forecast gas demand until 2019.
“This means that currently undeveloped gas reserves, including those reported as contingent resources and possible reserves, will be required to ‘come online’ to meet forecast demand as early as 2019 when developed reserves are forecast to start to deplete,” AEMO Managing Director and Chief Executive Officer Matt Zema said.
Zema said that the need to convert undeveloped gas reserves and resources into working gas fields from 2019 reflects forecasts from AEMO’s 2015 National Gas Forecasting Report (NGFR), which projects total annual gas consumption in eastern and south-eastern Australia to double over the next five years to 2020 as Queensland’s liquefied natural gas (LNG) export facilities ramp up production.
“The need to convert undeveloped gas reserves and resources into working gas fields from 2019 becomes clearer still when we take export LNG demand out of the picture,” said Zema.
The 2016 GSOO uses the demand forecast scenarios from the 2015 NGFR, and production and supply information provided by industry, including wholesale gas contract information, to assess the adequacy of gas infrastructure and resources to meet demand in eastern and south-eastern Australia to 2035. The GSOO is based on data provided by industry participants up to 10 December 2015.
“It’s important we highlight this now, as there are technical and commercial uncertainties associated with developing contingent resources and possible gas reserves,” said Zema. “And reducing this uncertainty requires the timely development of these resources at a time when low oil prices have led to a significant fall in revenue streams and reductions in capital budgets for gas developers and producers, heightening the risk that some resource development may not be commercially viable.”