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Posted by gasweek on 29 November, 2007

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Woodside seeking permission to conduct seismic testing for oil and gas in Vic’s Port Campbell area: 23 threatened species potentially affected

Posted by gasweek on 17 October, 2007

Woodside Energy wanted to conduct a new round of seismic testing for oil and gas off Victoria’s Port Campbell, potentially disrupting the feeding season of the endangered blue whale, wrote Ewin Hannan in The Australian (8/10/2007, p. 4). Testing period would coincide with peak abundance of whales: Woodside had applied to the Howard Government to undertake the testing between November and May 2008, a period coinciding with the peak abundance of blue whales in the region. The survey area was about 20km south of Port Campbell, the coastal town west of the giant rock stacks known as the Twelve Apostles. Peter Gill, a long-time blue whale researcher, had said the survey area lay well within the blue whale feeding area. “If the survey occurs during the blue whale feeding season, and the whales are usually present between November and May, it is possible that blue whales may be displaced from preferred feeding areas,” he had said.

Survey needed to map sub-surface geology: In its application to the federal Environment Department, Woodside had said the survey was designed to map the sub-surface geology and ascertain the potential of sub-surface oil and gas deposits for further investigation. A survey vessel would operate an airgun that released bursts of compressed air that pushed the water away, creating a pressure wave that was used as a seismic signal. The survey would involve 23 days of testing.

‘Temporary’ displacement of whales: As the holder of a petroleum permit, Woodside had said it was required to undertake exploration to deduce the area’s potential for oil and gas production. In its submission Woodside acknowledged that 23 species listed as threatened under federal environmental legislation might occur within, or travel through, the project area. They included three species of whale, the great white shark, 12 albatross species, and the critically endangered orange-bellied parrot. “There may be some temporary displacement of (whales) as a result of the seismic survey and localised impacts on feeding behaviour,” Woodside had said in its submission.

Posted in Exploration, Gas, natural gas, Victoria, Volume 2604, WA, Western Australia | Leave a Comment »

Victoria gas price and demand, 8 October 2007

Posted by gasweek on 8 October, 2007

Gas 081007

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Tues 18 Sept: October oil rises to $US81.24, a trading record; natural gas jumps to $US6.65 per 100 cubic feet

Posted by gasweek on 3 October, 2007

October oil rose as high as $US81.24 on Tuesday 18 September, a trading record, reported The Sydney Morning Herald (19/9/2007, p.24).

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Posted in natural gas, Price, Volume 2602 | Leave a Comment »

Multinet proposal to supply natural gas to towns in South Gippsland, Vic: $54.7m cost

Posted by gasweek on 2 October, 2007

A Multinet proposal related to providing natural gas to a group of regional towns in the South Gippsland area, including Lang Lang, Korumburra, Leongatha, Inverloch, and Wonthaggi, noted an Essential Services Commission statement (18/7/2007).

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Posted in natural gas, Victoria, Volume 2602 | Leave a Comment »

Draft decision by ESC to cut amount Victorian gas suppliers can charge for distribution of natural gas: 10 per cent cut on distribution

Posted by gasweek on 26 September, 2007

A draft decision by the Essential Services Commission (ESC), to cut the amount gas suppliers charge for the distribution of natural gas would reduce average distribution charges by more than 10 per cent, will put some downward pressure on gas bills. The cost of distributing gas represents around 40 per cent of a customer’s gas bill. Read the rest of this entry »

Posted in natural gas, Price, Victoria, Volume 2601 | Leave a Comment »

Arabian Gulf and Red Sea desalination model using subsidised natural gas distorts choices, encourages inefficient technologies, says World Bank

Posted by gasweek on 25 September, 2007

More than 50 per cent of the world’s total desalination capacity was located around the Arabian Gulf and a large proportion of the remainder took water from the Red Sea and eastern Mediterranean, wrote the WWF’s Phil Dickie.

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Posted in Middle East, natural gas, Volume 2520 | Leave a Comment »

ARC Kimberley model changes with +$70 oil and $5.00 gas: now for LNG and pipeline to the south

Posted by gasweek on 20 September, 2007

ARC Energy Managing Director, Eric Streitberg, in a paper to the Good Oil Conference in Fremantle, said the ARC Energy model had “all changed” with +$70 oil, and $5.00 gas in Western Australia. “Until two years ago oil was marginally economic and gas was uneconomic. With low oil prices, he said – its current transport method – $20 per barrel trucking to Perth –  plus opex – was  often more than the oil price. Now, ARC now planned domestic LNG, and had moved forward, its plans for its Northern Pipeline, to move gas south.

Canning Basin

Posted in Kimberley, LNG, natural gas, Pipelines, Transmission, Volume 2520, WA, Western Australia | Leave a Comment »

How to account for coal seam gas assets in SE Australia

Posted by gasweek on 18 September, 2007

Wood Mackenzie told the NSW Owen Review, 55 per cent (4,935PJ) of SE Australia Additional Potential gas resource can be developed and produced in the period out to 2030.  Wood Mackenzie said CSG projects tend to expand capacity incrementally and 2P reserves growth increases over time, until an economic plateau in production is reached and maintained.

Great leap forward: Wood Mackenzie  said this can be seen from a comparison of the Eastern Australia coal seam gas (CSG) reserves over time;

• In 2002, CSG 2P reserves were less than 500PJ; but

• by 2007, CSG 2P reserves are ~4000PJ.

The details were in the Wood Mackenzie paper commissioned by the NSW Owen Review; Availability and Cost of Gas for NSW Baseload Generation 31st July 2007.

Eastern Australia

Early stages of CSG development: The paper said,  during the early stages of CSG development, the initial focus of activities was establishing the economic basis for future production. This involved pilot projects which test the production capabilities of the coal seams. The completion techniques of the wells may also be tested to optimise the production rates relative to the well costs. Additional drilling may  begin to establish a 2P reserves base to enable sales contracts to be executed once economic production has been established. The 3P resource was high in this initial period, but the 2P resource was generally low. Only though further drilling could the 2P reserves be increased.

Negative effect on cash flow: With relative low production rates early on in a CSG projects development, drilling to establish 2P reserves can have a negative effect on cash flow. The conversion to 2P reserves therefore needs to be balanced against the expected rate of production growth (and commercialisation of the reserves through supporting contracts), particularly with smaller companies with limited financial resources.

As CSG projects begin commercial production, they can incrementally add capacity (pipelines, processing plant and compression) to increase production. The ultimate plateau rate for a project will depend on the available market, the costs of development, the production profile and ultimate recovery per well. As a result, CSG projects tend to expand capacity incrementally and 2P reserves growth increases over time until an economic plateau in production is reached and maintained.

How to account for coal seam gas assets: The criteria Wood Mackenzie used for the Additional Potential resources for SE Australia was:

• The ultimate Additional Potential reserves quantity used for a given project was limited to less than 80 per cent of the Possible reserves for the project;

• A modelled production plateau of at least ten years was required to support the level of capacity expansion.

This took into account the different production profiles of wells between projects. The number and timing of wells required (both production and work-overs) together with supporting infrastructure (pipelines, plant and compression) was analysed to determine the forecast production level. The production expansion of each CSG project was required to be economically viable at current gas prices.

• The Additional Potential gas resource represents a significant volume (8,578PJ) of potential gas for future development and production.

Note, this does not represent the ultimate 3P CSG resource potential of Eastern Australia, rather it is Wood Mackenzies view of the current 3P resource that we believe is capable of being economically developed in the period to 2030.

4,935PJ to 2030: Within the parameters set out above, we have forecast that 55 per cent (4,935PJ) of this Additional Potential gas resource can be developed and produced in the period out to 2030. The addition of further 3P reserves are likely over the forecast period as exploration continues and new projects are assessed

Posted in 2P, Coal Seam Methane, CSG, CSM, natural gas, SE Australia, Volume 2520 | Leave a Comment »

SE Australia: 260pc gas replacement, 2002 to 2007

Posted by gasweek on 18 September, 2007

Heaps of gas for NSW generation: Wood Mackenzie – commissioned by the NSW Owen Review; Availability and Cost of Gas for NSW Baseload Generation 31st July 2007, provided a gas supply forecast based on a project by project analysis of 2P (Proven plus Probable) gas reserves and supply capacity, and evaluated a portion of the 3P (Possible) gas reserves of specific CSG projects “capable of development and production within the period to 2030”.

SA Australia Gas Map

Analysis of a total SE grid supply: For this report, Wood Mackenzie has provided this analysis on a total supply basis for Eastern Australia, with future production divided into three categories, each with a different degree of certainty that the gas will be delivered to market. The three categories are: existing Contracted production, the Uncontracted remaining reserves, and the likely Additional Potential gas.

23 years supply at current consumption: Eastern Australia 2P Gas Reserves at 1 February 2007 showed a replacement ratio of 260 per cent over this five year period. The total 2P gas resource of Eastern Australia as of 1 February 2007 was 13,980 PJ. This equates to approximately 23 years of production at current levels.

Gippsland Basin still a player: The Gippsland Basin, with 6,859 PJ of reserves was the most significant region in Eastern Australia in terms of gas reserves (and production) despite over 30 years of gas production.

Cooper in decline: By contrast, the Cooper Basin had 1,213 PJ of 2P gas reserves and production was now in decline following 30 years of production. CSG 2P reserves were approximately 4,000 PJ.

The biggest source – Queensland: The main area of CSG reserves was located in SE Queensland. A comparison between the gas reserves (2P) in Eastern Australia over the last five year period (2002 to 2007) shows that despite approximately 2,800 PJ of sales gas being produced in this period, 2P gas reserves have actually increased by a net 4,710 PJ. This demonstrates a healthy reserves replacement ratio of 260 per cent over this five year period.

Posted in 2P, Coal Seam Methane, CSG, CSM, natural gas, NSW, Owen Review, Volume 2520 | Leave a Comment »

Prior to SEAGas, MAPS fully contracted, with no spare capacity at peak times: lack of pipeline capacity forces peaking units onto liquid fuels, says NEMMCO report

Posted by gasweek on 18 September, 2007

Utilising slightly higher priced gas prices in neighbouring zones may well be preferable to seeking low gas prices only to find the station having to run on liquid fuels due to pipeline capacity constraints. Prior to the SEAGas development, MAPS was fully contracted, with virtually no spare capacity available at peak times. This forced peaking units on to liquid fuels more often than not. Peaking stations generally did not reserve firm pipeline capacity, but instead relied on interruptible services with resort to liquid fuels if adequate pipeline capacity was not available when needed, noted ‘Fuel resource, new entry and generation costs in the NEM’, a report to NEMMCO by ACIL Tasman (27/3/2007).

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Posted in Liquids, natural gas, NSW, OCGT, Pipelines, Transmission, Victoria, Volume 2520 | Leave a Comment »

NEM zone with lowest gas cost is northern NSW at $2.38/GJ; only other zone below $3.00/GJ is southwest Qld, says NEMMCO report

Posted by gasweek on 18 September, 2007

The delivered gas prices projected to be available for gas-fired base/intermediate load plant in each of the 17 NEM zones were detailed in ‘Fuel resource, new entry and generation costs in the NEM’, a report to NEMMCO by ACIL Tasman (27/3/2007).

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Posted in 2P, CGGT, Coal Seam Methane, CSG, CSM, natural gas, Pipelines, Price, Queensland, Volume 2520 | Leave a Comment »

Origin plans 1,000MW CSG-fired power station at Spring Gully, Qld: gas cost $0.80/GJ

Posted by gasweek on 18 September, 2007

According to Origin Energy’s website, Origin gained the Queensland Government Coordinator General’s recommendation to develop a nominal 1,000MW coal seam gas-fired power station at Spring Gully, 80km north of Roma in central Queensland, said ‘Fuel resource, new entry and generation costs in the NEM’, a report to NEMMCO by ACIL Tasman (27/3/2007).

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Posted in Coal Seam Methane, CSG, CSM, natural gas, Price, Volume 2520 | Leave a Comment »

Origin plans Quarantine conversion to single 170MW unit: extra 75MW for SA, gas price at $3.90/GJ

Posted by gasweek on 18 September, 2007

Origin Energy previously announced its intention to convert the Quarantine Power Station units into a single 170MW combined cycle unit, and the project received development approval and the conversion of this unit could take from 18 to 24 months to complete from the time of the decision to proceed, according to ‘Fuel resource, new entry and generation costs in the NEM’, a report to NEMMCO by ACIL Tasman (27/3/2007).

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Posted in CGGT, Generation, natural gas, SA, SE Australia | Leave a Comment »

Agflation: Grain prices to rattle beef, dairy, pork, eggs and chicken: “disaster unprecedented in Australian history” predicts Horticulture Coun­cil chief

Posted by gasweek on 18 September, 2007

It’s called agflation and it’s coming very soon, propelled by climate change and drought. Grain prices have hit record levels, and those prices will ram­ify through the feed chain —beef, dairy, pork, eggs and chicken — and reach consumers. Australian Horticulture Coun­cil chief executive Kris Newton says the severe cutback in irriga­tion water could result in price rises, as seen with bananas after Cyclone Larry, reported Asa Wahlquist in The Australian, (15/9/2007, p.33).

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Posted in Ethanol, Liquids, natural gas, Policy, Price | Leave a Comment »

Victoria’s three main gas distribution businesses, Multinet, Envestra and SP AusNet subject to Draft Decision from January 2008

Posted by gasweek on 17 September, 2007

A Draft Decision, which will be finalised in November, would apply from January 2008 to Victoria’s three main gas distribution businesses, Multinet, Envestra and SP AusNet, according to a media release by the Victorian Minister for Energy and Resources.

Regulator determines balance: The Gas Access Arrangements Review occured every five years, when gas distributors made submissions to the regulator about their expected revenues, the release said. The regulator then determined average distribution charges that fairly balanced consumer and industry needs, and maintained returns that allow further capital investment.

Drought affects industry: The Minister stressed that the energy industry continued to be hit by the current drought, which had pushed up the wholesale costs of gas and electricity. He said demand for gas increased because gas-fired electricity generation was substituting for reduced hydro and coal-fired electricity generation, due to water shortages caused by drought. Gas was an effective but more expensive form of electricity generation, the Minister said.

Reference: Media release from the Minister for Energy & Resources, Victoria, 28 August 2007. Contact: Dan Ward. Phone: (03) 9651 5799. Mobile: 0407 138 680. Website:
http://www.vic.gov.au

Erisk Net, 28/8/2007

Posted in Distribution, natural gas, Policy, Price, Regulation, Retail, Victoria, Volume 2520 | Leave a Comment »

Residents of Rockbank in Victoria want natural gas

Posted by gasweek on 15 September, 2007

Don Nardella introduced a petition by residents of Rockbank to the Victorian Legislative Assembly on 22 August 2007.

Significant cost reductions: The petition called for natural gas to be installed in order that residents and local businesses in the Rockbank and surrounding areas could access natural gas supplies. Thanking members of the Rockbank action group for their hard work in organising this petition and bringing it to the house, Nardella said: “The provision of this infrastructure would then make gas readily available and reduce significantly the cost of this important energy resource.”

Reference: Don Nardella, Member for Melton, Legislative Assembly, Victoria, 22 August 2007.

Posted in Australia, natural gas, Victoria, Volume 2520 | Leave a Comment »