murry meaton - economics consulting services - outlook for thewa gas market
TRANSCRIPT
How long will it last?
At the current rate pre-Gorgon/Wheatstone
about 50 years.
For domestic use only
about 190 years
Plus non-conventional and new discoveries
We have a lot of gas
Resources are not a constraint on availability
Potential Supply factors
Gas supply is not an issue and nor is
processing plant capacity
Supply could be even further enhanced
by Perth Basin, non-conventional, Pluto
and maybe Browse Basin
We have very large reserves and excess
capacity
Demand changes:Alumina (30%)
Closure more likely than expansion
Grid electricity (30%)
excess generation capacity for 10 years
possible retirements
DSM may be scaled back
Mine site electricity (20%)
Only gold has medium term growth outlook
Nickel could see closures -40TJ/day
Gas processing (Ammonia/LNG/LPG) (12%)
Transport use of LNG has long term potential
Commercial and residential (5%) – slow growth
Demand
Historic industries
Alumina and nickel more negative than plus
Grid electricity limited growth
Blue sky potential
Transport fuels
Methanol
Fertilisers
Coal generation replacement
How will the market adjust:
No new contracts other than renewals
Capacity idled
Supply diverted to other markets
LNG
Processing
Price outlook Reserve and capacity overhang for at least 5 years and
probably 10
LNG oversupply for a similar duration
LNG producers likely to idle processing capacity and defer
production
LNG suppliers reluctant to make low price domestic sales
The government can pressure some sales “if commercial”
Lack of joint selling and new suppliers will increase sale
potential
New demand will only come as a result of low prices
Domestic gas price rises appear unlikely for medium term
outlook – less than $6 at plant gate is best guess