Beach sees east Australia LNG imports as price setter

Australian independent Beach Energy expects the building of an LNG import terminal in east Australia will become the price setter for gas prices in Victoria, New South Wales (NSW), South Australia and Tasmania states.

"Beach estimates an LNG import facility would become a marginal price setter in southern states at more than A$10/GJ ($7.70/GJ)," said company chief executive and managing director Matt Kay. The Argus Victoria gas assessment was settled at A$6.375/GJ on 30 April, down by A$0.258/GJ on the previous assessment.

There are five LNG import terminals proposed to be built in east Australia. The 2mn t/yr Port Kembla gas terminal in NSW by 2023 would be the first of a possible two built to counter the long-term decline in gas supplies from traditional producing basins such as offshore Victoria.

Beach is not involved in any LNG import project and instead is focused on gas production in east Australia. It is planning to bring on line gas from the first of three fields in the Otway basin offshore Victoria in the 2021-22 fiscal year to 30 June with the Geographe field, followed by the Enterprise and Thylacine fields in 2022-23. Total development spending on the three fields is estimated at A$1bn, with gas from the offshore Otway fields to be processed through the 205TJ/d (5.5mn m³/d) Otway gas plant.

Beach is also planning to make a final investment decision on the Trefoil gas field in the Bass basin offshore Victoria in 2022-23 with its first gas in the second half of 2024-25. Trefoil is estimated to cost around A$500mn-A$600mn to develop.

By Kevin Morrison