The Queensland coal seam gas (CSG) and liquefied natural gas (LNG) industry is developing at a rapid pace and the startup of production is looming closer. The large scale use of CSG to produce LNG for export is unique to Queensland and there will be a lot of scrutiny on the results, both here and abroad. Santos Limited (ASX:STO), Origin Energy Limited (ASX:ORG) and BG Group all have interests in major CSG LNG projects in Queensland.
Origin Energy this week said it's increasing its exposure to conventional and unconventional resources to address major LNG export hubs and the domestic market. The energy producer says Australia is forecast to emerge as the world’s largest liquefied natural gas exporter in the next three years.
FNN also spoke to Horizon Oil this week about its soild full year results and the outlook for future growth.
Economic news
Debate continues about the domestic price impact of gas being directed to export. Federal Industry Minister, Ian Macfarlane, this week said an option to address East coast gas shortages could be a pipeline to Northern Territory gas supplies once Queensland gas projects begin exporting.
This comes amid manufacturing industry requests for domestic gas to be allocated for domestic use to shield it from higher export prices.
Commentary
In oil news this week, FNN spoke with Brent Emmett, the CEO of Horizon Oil, about the company's latest full year results as well as the outlook for the company's next 12 months.
Production
"We produced 1.4 - 1.5 million barrels of oil and we generated revenue of about $140 million. It was a very good year for us."
"The main drivers of growth in this previous year were that we had a full year of production from our China fields. These came on stream in the first half of calendar 2013 and we had a full year's production. The fuel produced better than we'd planned."
Asset sales
"A key achievement for us this year was the sale of a 40 per cent interest in a PNG asset position. We have a large position in that country and it was important for us to get a quality partner to help us develop those reserves we've done that in attracting Osaka gas to join us."
"We've realised about $US200 million in the sale. The first payment of that, with adjustments was about $US78 million and we received that in June 2014."
"That money will be the basis for our investment in the Stanley field investment in PNG. That really covers our entire investment in the development."
Outlook, FY15
"This financial year we're expecting an increase of about 30 per cent in production and revenues. We're expecting revenue to be about $US170 million and EBITDA to be about $US120 million."
See the full interview
here.
Energy deals
Central Petroleum Limited
(ASX:CTP) says the drilling operation at its 30 per cent stake in a Mt Kitty exploration well in the Northern Territory has shown good results. The Southern Amadeus Joint Venture with 70 per cent owner Santos as operator has shown positive results for hydrocarbons and helium gas and that Santos is now ready to proceed with stage 2 of Central’s exploration permits in the area.
Origin Energy Limited
(ASX:ORG) is increasing its exposure in conventional and unconventional resources to address major LNG export hubs and the domestic market.
The energy producer says Australia is forecast to emerge as the world’s largest liquefied natural gas exporter in the next three years.
Energy Developments
(ASX:ENE) has entered agreements with AngloGold Ashanti Australia
(ASX:AGA) to expand and extend power supply at its Sunrise Dam mine. Operation of the new expansion of Sunrise Dam is set to begin by the end of December and contracted to last until 2025. The upgrade includes replacement of diesel generators with high-efficiency gas generators, coinciding with the installation of a new pipeline to supply natural gas to the site.
