Gas Week

EWN Publishing

Queensland coal seam gas exports to NSW from Wallumbilla to supply gas into Newcastle to 2016: then NSW imports, from Western Australia, by pipe or LNG

Posted by gasweek on 12 October, 2007

Under the generation scenarios provided by the Owen Inquiry Secretariat, the potential to import Queensland and Victoria gas to NSW for the period to 2016, was substantial, although this would require expansion of existing gas transmission, as well as new pipeline investment.

Qld – Vic imports to meet demand until 2020: Wood Mackenzie’s analysis indicated that there was likely to be sufficient gas supply available to meet this demand out to at least 2020. In particular, there was a need to:

• develop a gas pipeline directly from Wallumbilla to supply gas into NSW; and

• connect to Newcastle and/or Bulla Park in central NSW.

Critical new security of supply: This new pipeline would complete an important loop in the gas transmission system that would improve overall security of gas supply as well as support exploration and development of potential new gas supplies within NSW along the pipeline route.

Gas growth a big surprise: Wood Mackenzie forecast CSG production potential was such that by the end of next decade, CSG could account for more than 50 per cent of the total gas supply in Eastern Australia. In particular, Coal Seam Gas (CSG) reserves had grown from less than 500PJ to around 4000PJ in the corresponding period. CSG was accepted in the industry as a reliable source of gas supply (typified recently by Rio Tinto Aluminium’s contract with Origin Energy for 20PJ/a over 20 years to supply the expansion of their Gladstone Alumina refinery).

Coal seam boom: Whilst beyond 2020 there was greater uncertainty, the CSG industry continued to increase gas reserves at an impressive rate and the ultimate potential of this industry in Eastern Australia could be enormous (with potentially decades of supply). There was scope for additional gas to be discovered and developed in the intervening period from conventional sources. Ultimately the option existed for importation of gas from Western Australia by new pipeline or as Liquefied Natural Gas (LNG). There was also scope for demand growth in this period to be reduced as new gas fired generation options switched to alternative fuels/technologies, delaying the requirement for long distance supply.

Reference: Owen Inquiry into Electricity Supply in NSW, Availability and Cost of Gas for NSW Baseload Generation, 31st July 2007
This report has been prepared for the Owen Inquiry by Wood Mackenzie. Sydney, Suite 108,Level 1, 16-20 Barrack Street, Sydney, NSW 2000, Australia. Phone +61 2 9299 0989. Fax: +61 2 9299 0669. Consultants: Ian Angell, Phone: +65 6518 0862; Andrew McManus, Phone: +61 2 9299 0989; Richard Quin, Phone: +44 131 243 4378; David Bradley, Phone: +61 8 9430 9599; Graham Tyler, Phone: +65 6518 0823; Valery Chow, Phone: +65 6518 0854; Karthikeyan Sathyamoorthy,Phone: +65 6518 0853; Facsimile: +61 2 9299 0669, e-mail: Andrew.McManus@woodmac.com

Erisk Net, 31/7/2007

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