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

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.

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

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).

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

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).

Origin plans 1,000MW CCGT plant at Mortlake, Vic: gas cost at $3.23/GJ

Origin Energy was proposing to construct up to 1,000MW gas powered base/intermediate load plant at Mortlake in Western Victoria, according to ‘Fuel resource, new entry and generation costs in the NEM’, a report to NEMMCO by ACIL Tasman (27/3/2007).