Resources Commentary: Australia's gas leak

General News

The stats
The Bureau of Resources and Energy Economics report, released in the past fortnight, said that nationally liquefied natural gas export earnings soared 34 per cent to $10.5 billion in 2010 – 2011.
In the Queensland government's annual Gas Market Review for 2011, domestic gas prices for eastern states are forecast to rise by 50 per cent by 2030 because of competition from export markets.

The government's excitement
Australia is emerging, or almost has emerged, as a major gas hub.

Federal resources and energy minister Martin Ferguson said that means two things: 'A wealth of career options for young Australians, and a path to enhanced energy security for Australia and our trading partners.'

He told the 2011 Gas Speak Colloquium on September 12 that the gas industry is emerging as a vital element in ensuring energy security and meeting energy needs, as we transition to a lower emissions economy.

Australia's LNG exports are forecast to exceed $10 billion in value this financial year, and Australia currently has six LNG projects in various stages of construction.

'Within four years, we expect to be shipping in excess of 50 million tonnes of LNG per annum,' he said.
Those figures would make Australia the world's second-largest LNG exporter behind Qatar.

Ferguson made particular note of the Final Investment Decision Shell made on its Prelude floating-LNG project in May this year.

'Prelude is on track to be the world's first floating LNG facility - and what a facility it will be,' he said.
'Around three times the length of the MCG, using five times the amount of steel in the Sydney Harbour Bridge and weighing almost six times as much as the largest aircraft carrier in the world – Prelude will be the biggest floating facility ever built.'

Other LNG projects to potentially take final investment decisions in the next 12 months include Wheatstone, Ichthys and Browse LNG.

Some of the world's largest LNG-supply agreements underwrite these projects.

Ferguson said there is: 'huge potential to develop Australia's tight and shale-gas reserves and we recently saw Beach Energy book Australia's first contingent shale-gas reserves.'

But with political excitement, comes policy agenda.

The Federal Government has released draft legislation in two key policy areas - resource taxation and carbon pricing.

Although the policies have been fiercely debated within the mining industry, Ferguson said the introduction of the Minerals Resource Rent Tax and the extension of the Petroleum Resource Rent Tax strike 'the appropriate balance between maximising and spreading the benefits from the development of our resources without being a deterrent to continued investment.'

Companies
Politics and policies aside, who are the major Australian gas players?

Among the biggest players on the market are Beach Energy Limited (ASX:BPT), Dart Energy (ASX:DTE), and Origin Energy (ASX:ORG). On August 30, Beach Energy Limited (ASX:BPT), reported a full year net loss of $97.5 million for the 12 months to June, down from $33.1 million net profit the year before. The company said the result was due to costs related to stopping production at the BMG project. Beach declared a final dividend of one cent per share, fully franked, adding to an interim fully franked dividend of 75 cents per share.

Meanwhile, Origin Energy Limited (ASX:ORG) met its full year guidance and posted a 15 per cent increase in underlying net profit and forecast a 30 per cent rise in the year ahead.

In the 2011 financial year the energy retailer's net profit dropped 70 per cent to $186 million, weighed down by impairment charges on assets and acquisition costs.

Other Australian listed companies dealing with gas include: AED OIL LIMITED (ASX:AED); ADVANCE ENERGY LIMITED  (ASX:AVD); AUSTRALIAN WORLDWIDE EXPLORATION LIMITED, (ASX:AWE); ANZON AUSTRALIA LIMITED (ASX:AZA); ANTARES ENERGY LIMITED (ASX:AZZ); BASS STRAIT OIL COMPANY LIMITED (ASX:BAS); BUCCANEER ENERGY LIMITED (ASX:BCC); BHP BILLITON LIMITED  (ASX:BHP); BOW ENERGY LIMITED  (ASX:BOW); CENTRAL PETROLEUM LIMITED (ASX:CTP); CALTEX AUSTRALIA LIMITED (ASX:CTX) EASTERN STAR GAS LIMITED (ASX:ESG); GOLDEN GATE PETROLEUM LTD (ASX:GGP); KAROON GAS AUSTRALIA LIMITED (ASX:KAR); KEY PETROLEUM LIMITED (ASX:KEY); LONGREACH OIL LIMITED (ASX:LGO); OIL SEARCH LIMITED (ASX:OSH); ROC OIL COMPANY LIMITED  (ASX:ROC) SUNDANCE ENERGY AUSTRALIA LIMITED  (ASX:SEA); SANTOS LIMITED  (ASX:STO); STRIKE OIL LIMITED (ASX:STX); WOODSIDE PETROLEUM LIMITED (ASX:WPL); and ARROW ENERGY LIMITED  (ASX:AOE).