Via The Australian:
Gas buyers and sellers have cast doubt on the ability of Queensland’s vast coal seam gas fields to supply coming export and domestic demand in the wake of Origin Energy’s downgrade of reserves at its Ironbark coal seam gas project.
EnergyAustralia energy boss Mark Collette said the fields, which underpinned development of $70 billion of Gladstone LNG exports on the expectation they would provide gas for 20 years, were becoming harder to produce from.
“The free flowing first (CSG) wells were competitive with the big fields (of Bass Strait and the Cooper Basin), a lot of the rest is not,” Mr Collette said at the Australian Domestic Gas Outlook Conference in Sydney today.
“There’s lots of gas in the ground, but the cost of its extraction is higher than the older fields. We have not seen any shale-like breakthroughs in costs for coal seams.”
BREE estimates gas extraction for APLNG (the cheapest of the three) ranges from $3-8 all-in costs:
We need to reserve that cheap gas now on fixed price quota of $5 per Gj for 200Pj. Let the shareholders take the pain not the economy. To wit:
Meanwhile, bankruptcy looms:
Incitec Pivot’s Gibson Island fertiliser plant at Brisbane, set to become loss-making when old gas contracts expire this year, has been given a glimmer of hope after Incitec partner Central Petroleum won ground in Queensland’s latest release of gas ground specifically to be developed for domestic markets.
Queensland Resources Minister Anthony Lynham announced today at the Australian Domestic Gas Outlook conference in Sydney that Central (CTP) and Armour Energy (AJQ) had been awarded ground.
Gibson Island, which employs 500 people and, Incitec (IPL) says, another 1,500 indirectly, will close at the end of the year if it cannot secure gas priced well below current rates.
That’s more jobs than all three LNG plants combined.
