Kimberley coast to Gladstone $2
Wednesday 15 June 2016
The prospect of gas from the West Coast of Australia being sold and processed through Gladstone was a realistic possibility pondered by some of the country's biggest gas players at a conference in Brisbane last week.
Theoretically, it will become possible by the end of next year when$37 billion Ichthys LNG project in Darwin becomes operational, and the Chinese-owned Jemena company finishes an $800 million pipeline from Tennant Creek to Mt Isa.
Seiya Ito, president of Inpex’s Australian operations, said the planned North East Gas Interconnector that will link the Darwin, and east coast markets could provide the chance to sell Browse Basin gas to the eastern states.
“Once you have all the infrastructure in place from offshore Kimberley, all the way to Darwin, there will also be the North East pipeline,” he said.
“I cannot tell you if our gas will go there yet, but there are a lot of potential expansion options, and one might be gas sales to the East.”
“Expansion is very important for Ichthys, and Inpex is looking for the next opportunity, we can expand our plant capacity at Darwin, up to a fourth train, we can debottleneck to increase capacity a bit more, and there is the potential for domestic gas sales.
“We will assess any opportunity, and if it is commercially viable, we will go after it.”
According to The Australian, once the infrastructure is built it would cost about $2 per gigajoule to ship gas from the Browse Basin to Queensland, which is roughly a quarter of where gas prices are expected to be by around 2018.
Already Jemena business development manager Antoon Boey says the Gladstone Curtis Island Facilities are struggling to meet growing demand for their product
“It is very easy to underestimate the amount of gas that’s needed on the east coast, taking LNG and domestic gas demand together,” he said.
“The LNG plants are running at more than 100 percent of design capacity already, just a few months after commissioning.
“The six LNG trains built in Gladstone are all likely to be fully utilised for a few years, but the gas supply in Queensland is fairly costly to produce (after coal-seam gas suppliers move off sweet spots).“So if the developers in the NT can devise a cost-efficient future for unconventional gas development like they have in the US, I could see a very strong logic that says NT gas will move east, as opposed to moving north (as LNG exports out of Darwin).”
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