It’s all about gas this week on the energy report with a forecast by Goldman Sachs throwing cold water on estimates of gas demand going forward. The investment bank suggested demand growth could be down to around 5 per cent towards 2020 as opposed to its previous forecast of around 6 per cent. The obvious outcome seems to be high cost operations being put on hold. A range of Australia’s LNG producers booked considerable losses on Thursday after the comments.
Also on Thursday the New South Wales Chief Scientist and Engineer released a statement suggesting that coal seam gas extraction techniques have matured and that if well managed, their damage can be minimised.
The report from the state’s chief scientist came after the freeze on petroleum licence applications was extended at the end of last month. It was stated by the NSW Minister for Resources and Energy that more time was needed to allow the Office of Coal Seam Gas to investigate the application process.
Economic News
With demand projections coming in from all directions we thought it would be useful to look back at some other recent forecasts.
The US Energy information Administration suggested, at the beginning of September, that liquid fuels consumption would increase 38 per cent by 2040. The EIA views the demand coming from the developing Asian and Middle Eastern economies.
This comes amid supply side talk from China as its National Energy Administration cut its shale gas output target. The Chinese NEA halved its forecast looking toward 2020.
It’s a question of data and with so many sources it difficult to get a read. What’s certain is that there will soon be a lot more gas being traded and prices will tell the tale of how demand has been matched to supply.
Mining pushback
AGL Energy Limited
(ASX:AGK) has welcomed a report on coal seam gas from the NSW Chief Scientist and Engineer. The energy company has highlighted the result's findings, claiming coal seam gas extraction and related technologies are mature and Australia is well equipped to manage their application.
AGL Energy is tackling coal seam gas concerns by launching a new campaign to educate the community. The energy producer says the campaign is trying to build understanding of the importance of coal seam gas in the New South Wales energy mix.
Doing deals
Uranium developer Toro Energy Limited
(ASX:TOE) has entered into a farm in and joint venture with the Australian arm of French energy company, Areva. The agreement is over Toro’s under-explored Wiso Basin exploration ground in the Northern Territory.
Otto Energy Limited
(ASX:OEL) announced the sale of its Galoc Production Company to Singapore-based Risco Energy Investments. Risco will pay Otto US$101 million for its 33 per cent interest in the Galoc oil field in the Phillipines.
New fields
Horizon Oil Limited
(ASX:HZN) says it has made a new oil discovery at its 55 per cent owned Beibu Gulf development in China. The joint exploration venture is 40 per cent held by Roc Oil with the remaining 5 per cent owned by Oil Australia.
AWE Limited
(ASX:AWE) says it has confirmed a significant gas discovery for the Waitsia Field in the north Perth Basin. The oil and gas explorer believes the Senecio/Waitsia discovery is potentially the largest conventional onshore gas discovery in Western Australia since the 1960s.
