2014 December Gas Statement of Opportunities Joachim Tan Senior Analyst, System Capacity Stakeholder Presentation 3 February 2015
Forecast context Findings Forecasts Other information 2
Forecast context Challenging time to prepare long-term forecasts of gas demand and supply: • Volatility in oil prices • Significant fall in the prices of WA commodities • North West Shelf and related commercial decisions • Falling Asia Pacific gas prices, making supply to the domestic gas market relatively more attractive 3
Falling oil prices, January 2014 – January 2015 (Brent) $120 $110 OPEC 27 November 2014 $100 Decision $90 US$/barrel Peak - Brent price US115.19 on 19 $80 June 2014 $70 $60 December 2014 GSOO Released $50 $40 Source: EIA, Brent Spot Prices FOB 4
Changing oil (Brent and average) forecasts for 2015 $90 $80 $70 $60 US$/Barrel $50 $40 $30 $20 $10 $- Q4 2014 Forecast Q1 2015 Forecast IMO - December 2014 GSOO EIA Goldman Sachs JP Morgan BoA Merril Lynch Standard and Poor Morgan Stanley Citibank OECD Source: Compiled by the IMO 5
Commodity prices, January 2014 – December 2014 100 90 80 70 Index Value 60 50 40 30 20 10 0 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Index of commodity prices; All items US$ Index of commodity prices; Bulk commodities (spot); US$ Source: Reserve Bank of Australia, Base Year = 2012-13 6
North West Shelf update NWS and WA Government signed an amendment to the State Agreement on 20 November 2014 (awaiting ratification by WA Parliament) that requires the NWS to: • adhere to the WA Government’s domestic gas policy – reserve approximately 715 PJ • upgrade and maintain the NWS domestic gas facilities with sufficient capacity • diligently market the committed gas quantities to the domestic market • report to the WA Government annually While the Agreement Amendment provides more domestic supply certainty, several on going decisions have to be made. 7
North West Shelf update It now appears likely that some supply will be available from the NWS beyond 2020 but ….. the amendment does not specify : • the timing or a minimum amount of domestic gas that must be made available beyond 2020 • the minimum level of domestic gas production capacity that must be maintained The availability of domestic gas from the NWS remains contingent on whether the NWS can profitably and commercially maintain gas supply to the domestic market and multiple investment decisions (beyond Persephone) are yet to be made by the JVs. However, in the 2015-2024 period, Hess may contract NWS to supply domestic gas (subject to commercial negotiation). Hess announced on 23 December 2014 its intention to develop and toll its WA gas reserves through the NWS processing facilities. 8
Forecast context Findings Forecasts Other information 9
Key findings • The supply of gas to the domestic market is expected to be adequate to meet demand over the forecast period • However, with several commercial and investment decisions yet to be made, the extent of any future supply from the NWS is not yet known with certainty, and the supply-demand balance may tighten after 2020 10
Supply – Demand balance 2,100 1,900 Quantity (TJ per day) 1,700 1,500 1,300 1,100 900 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Expected gas demand Lower potential gas supply forecasts Upper potential gas supply forecasts Total production capacity Source: NIEIR and IMO Estimates, 2015-2024 11
Other findings Gas Demand • Demand in the non-SWIS areas will grow faster than SWIS • Rapid growth of total gas demand (domestic & LNG); start-up of Gorgon, Wheatstone and Prelude domestic gas & LNG projects Resources and Reserves • Conventional gas reserves is estimated to last between 12 to 37 years, depending on technology (Table 9.4), unconventional reserves (105 years) • Gas production in WA remain reliant on conventional reserves in the Carnarvon Basin (Table 9.5) • Exploration of unconventional resources need to be fostered 12
Forecast context Findings Forecasts Other information 13
Gas demand 2015 – 2024 Growth in the early years of the gas demand forecasts is driven by new large gas-consuming projects. These projects include: • Sub161’s CNG facility at Port Hedland • the Fortescue River Gas Pipeline • the Eastern Goldfields Gas Pipeline And increased gas consumption relating to: • Alinta Energy’s Newman Power Station which will supply electricity to the Roy Hill mine • operation of TransAlta’s South Hedland Power Station • the Pilbara Temporary Power Station • CITIC Pacific’s Sino Iron’s magnetite mine 14
Domestic gas demand and forecasts 1983 – 2024 1400 1200 Quantity (TJ per day) 1000 800 600 400 200 0 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Historical gas consumption Base demand forecast High demand forecast Source: DMP and IMO Estimates, 2015-2024 15
IMO and CMEWA WA demand forecasts 2015 – 2023 410 400 Quantity (PJ per annum) 390 380 370 360 350 340 2015 2016 2017 2018 2019 2020 2021 2022 2023 CMEWA's forecast NIEIR's forecast Source: CMEWA, Deloitte Australia and IMO Estimates, 2015-2023 16
Total gas demand forecasts 2015 – 2024 6,000 5,000 Quantity (PJ per annum) 4,000 3,000 2,000 1,000 0 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Base scenario High scenario Source: NIEIR and IMO Estimates, 2015-2024 17
Forecast prices used in modelling 2015 – 2024 $12.0 $10.0 $8.0 Price (A$ per GJ) $6.0 $4.0 $2.0 $0.0 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 December 2014 Base scenario January 2014 GSOO Base scenario Source: NIEIR and IMO Estimates 2015-2024 18
Gas supply forecasts 2015 – 2024 2,100 1,900 Quantity (TJ/day) 1,700 1,500 1,300 1,100 900 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Lower Potential Gas Supply Forecasts Upper Potential Gas Supply Forecasts Total Production Capacity Source: IMO Estimates 2015-2024 19
Forecast context Findings Forecasts Other information 20
What’s new in the December 2014 GSOO Modelling • Prospective gas projects included in High gas demand scenario • Improvements to gas consumption estimates of iron magnetite projects • Improvements to potential gas supply model (considers non-LNG linked facilities) • LNG feedstock and processing requirements (now considers utilisation rates) Information • Greater use of GBB data (more details to come) • More detailed analysis of demand and its drivers 21
Other information in December 2014 GSOO Additional Information on: • Drivers of domestic gas consumption • Gas production outages • Gas injection and withdrawals (Mondarra) • Gas production statistics • Gas shipping by pipeline 22
Gas demand, August 2013 – November 2014 100% 8% 9% 10% 9% 10% 10% 10% 10% 11% 12% 13% 12% 90% 7% 7% 5% 7% 6% 7% 6% 7% 5% 5% 5% 7% 80% 2% 11% 11% 8% 11% 11% 11% 12% 11% 11% 10% 11% 15% 70% 12% 15% 12% 12% 14% 12% 12% 12% 12% 13% 14% 60% Proportion 50% 34% 32% 28% 32% 30% 32% 29% 29% 31% 30% 33% 31% 40% 30% 20% 32% 31% 30% 31% 30% 30% 30% 29% 28% 29% 27% 26% 10% 0% Dec-2013 Feb-2014 Apr-2014 Jun-2014 Aug-2014 Oct-2014 Minerals processing Electricity Mining Industrial Other Distribution network Source: IMO GBB 23
Production facility outages, August 2013 – November 2014 18% 16% 14% 12% Proportion 10% 8% 6% 4% 2% 0% Source: IMO GBB 24
Gas injections and withdrawals (Mondarra), August 2013 – November 2014 100 90 80 Quantity (TJ per day) 70 60 50 40 30 20 10 0 Aug-13 Oct-13 Dec-13 Feb-14 Apr-14 Jun-14 Aug-14 Oct-14 Gas withdrawn Gas injected Source: IMO GBB 25
Gas production statistics, Q4 2013 to Q3 2014 Facility Nameplate Peak production Day of peak Average production capacity (TJ per October 2013 to production day) September 2014 Q4 2013 (TJ Q1 2014 (TJ Q2 2014 (TJ Q3 2014 (TJ per day) per day) per day) per day) Beharra 19.6 19.8 5/10/2013 10.2 9.2 13.9 18.1 Springs Dongara 7 2.5 4/9/2013 2.1 1.8 1.7 1.4 Devil Creek 220 172.5 22/11/2013 135.6 69.6 65.8 76.2 KGP 630 671.9 1/8/2013 443.6 459.2 470.0 493.7 Macedon 200 213.1 10/9/2013 164.5 141.5 142.9 152.3 Red Gully 10 14.7 14/4/2014 7.6 6.0 4.0 7.7 Varanus 390 371.7 3/1/2014 272.5 299.4 271.6 234.9 Island Total 1476.6 1,036.1 986.7 969.9 984.3 Source: IMO GBB 26
Recommend
More recommend
