Australian liquefied natural gas production hit a record high in the third quarter, but concern continues to mount for long-term LNG output without further development.
EnergyQuest estimates Australian hydrocarbon production was a record 288.4 million barrels of oil equivalent during the quarter, up 21.6% on the previous three months, driven by record LNG exports of 21.1 million tonnes.
The consultancy said the result highlighted “a recovery in national LNG production”, which had been affected recently by the performance of several developments in Western Australia.
Rolling shut-downs of all three trains at Chevron’s Gorgon LNG development had affected production over the financial year ending 30 June, after cracks were found in the eight heat exchangers of Train 2 during routine maintenance in July last year.
After a subsequent inspection, the project’s other two trains were sequentially shut down for repairs and maintenance. All three returned to production by the third quarter of 2021.
Chevron did experience another short shutdown in November at Train 1 following the detection of a gas leak on piping associated with the dehydration unit. However, the train was back up and running before the end of the month.
EnergyQuest also noted in its quarterly report that output had been affected in the previous financial year by “patchy results” from the Woodside Petroleum-operated North West Shelf (NWS) venture, while Shell’s Prelude floating LNG development was finally operating at near nameplate capacity in the third quarter, following multiple issues since start-up.
Prelude’s improved performance has been short-lived, however, after Shell suspended production and evacuated staff following a fire on 2 December.
EnergyQuest also highlighted “a strong recovery in production” at the Inpex-operated Ichthys development after a scheduled maintenance shutdown in the second quarter.
The consultancy noted that Australia’s strong LNG production continued into the final quarter. A record 7.32 million tonnes was shipped in October, equating to 85.1 million tonnes per annum on an annualised basis, which is above the previous record of 84.8 million tpa on an annualised basis set in March this year.
Australia’s liquids production was also on the rise in the third quarter, with condensate output hitting a record 26.3 million barrels, which EnergyQuest said was due to “the stars aligning at most of the country's liquid-rich LNG projects”.
Oil output also totalled 10.4 million barrels in the recent quarter, up from 9.6 million barrels in the second quarter, which EnergyQuest attributed to good results from Woodside’s Vincent project and NWS, and a rebuild of volumes from the Santos-operated Van Gogh project.
While Australia is experiencing a boom in LNG exports, EnergyQuest warned there could be a bust to follow soon if more reserves are not developed.
Based on the life of existing resources, it estimates NWS could exhaust its reserves as early as 2028.
Woodside’s Browse development has long been earmarked to provide backfill gas for the NWS joint venture’s 16.9 million tpa Karratha gas plant.
However, gas from the reservoirs that make up Browse contain between 8% and 12% carbon dioxide, and there are doubts over the high CO2 intensity project proceeding in a market that is increasingly concerned over emissions from the wellhead to discharge terminal.
EnergyQuest also estimates that Chevron’s Wheatstone LNG development could exhaust its reserves as early as 2033.
Prelude’s reserves could be depleted by 2044, the same year EnergyQuest expects the Santos-operated Darwin LNG facility in the Northern Territory to run out of supply, including reserves from the recently sanctioned Barossa development.
It estimates Ichthys, Gorgon and Woodside’s recently sanctioned Scarborough development, which will add life to the Pluto LNG facilities, will all run out of reserves by around 2050.