Australia soon to be a world leader in natural gas

Oil and Gas

Gas extraction of Australia’s northern coastline is increasing rapidly.

Australia’s mineral sector has long relied on iron ore and coal as some of the country’s largest exports. However, natural gas has come a long way, with the country expected to become a major provider of hydrocarbon resources in coming years.

Offshore gas extraction in particular is an area which is seeing substantial growth, especially off the northern shores of the country.

What is the future of natural gas in Australia?

Within a few years Australia is forecast to become a leader in the global natural gas industry. According to research from the University of Tulsa in Oklahoma, Australia will become the third-largest exporter of natural gas in the world, overtaking Qatar.

Between 2005 and 2012, the country’s gas exports have already grown by 88 per cent, already making it a serious producer on the world stage.

However, in coming years, this will grow even further. Australia currently has seven projects planned to increase gas extraction, combining with three that are already operational.

These operations are spread from the north-west coast of WA, across the Northern Territory and into Queensland, representing 64.5 per cent of the planned gas extraction globally. The seven new extraction sites are also expected to require a $170 million investment before they become operational.

By 2017, these projects will likely added another 61.5 million tonnes per year (tpy) to the country’s overall production. Currently, Australia is producing 24 million tpy of natural gas.

Why is Australian gas taking off?

There are a number of reasons Australia has become such a major player in the oil and gas sector, notably down to improving technologies for extraction and increasing global demand.

Many of the gas deposits located off the north-west coast of WA are found beneath deep water, making it a technical challenge to access them, and requiring a greater investment in the relevant technology.

Australia also has the potential for onshore gas extraction from coal seam and shale gas, with many of these located in the centre of the country. Although shale gas isn’t expected to be a major contributor to short-term growth in gas exports, the University of Tulsa study did suggest that, in the future, onshore shale gas extraction would become more popular.

In fact, the study cited figures from the US Energy Information Administration which suggested Australia has the seventh largest deposits of shale gas in the world.

A new mining boom

This rapid growth in the production of natural gas in Australia is setting the stage for a new boom to rival that of other minerals exploitation, according to research from HSBC. The bank estimates these planned LNG developments will continue to occupy the majority of new investment in Australia’s minerals sector, with exports increasing between three and four times by the year 2020.

Part of the reason for this development is the improvements that have occurred in shipping LNG to a global audience. The cost of processing natural gas has fallen far enough to make it economical to export further afield, while Australia’s proximity to key Asian markets make cities like Darwin a cheaper point of origin, compared to the Middle East.

Construction faces unique challenges

As the rigs designed to extract natural gas move from planning to construction and investment, there are a number of challenges that need to be addressed. With rigs operating far from land, providing even basic services like heating and ventilation become complex logistical obstacles.

Even the act of constructing a rig can create operational issues for those involved. Providing power for the remote construction of a gas rig often requires temporary construction facilities before production can begin.

The Gorgon gas project is just one example – representing Australia’s largest investment in mineral resources extraction and a major component in the country’s future plans to export natural gas. For the construction phase, MPower was commissioned to provide power generation facilities to the remote Barrow Island where the rig is under construction.

While the challenges that are presented by remote gas extraction are considerable, the current boom in investment will likely see a greater number of companies pursuing innovative energy solutions to complete these major projects.

To learn more about electrical services for the gas industry, make sure you contact MPower.


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