In this report, ‘gas resources’ refers to resources from conventional natural gas and unconventional gas, including coal seam gas (CSG), shale gas and tight gas.
Australia has substantial gas resources. Gas is Australia’s third-largest energy resource after coal and uranium. Australia’s identified conventional gas resources have grown substantially since discovery of the super-giant (>10 trillion cubic feet [tcf]) and giant (>3 tcf) gas fields along the North West Shelf in the early 1970s. Gas resources have increased more than fivefold over the past 40 years. Australia’s gas resources are large enough to support expected domestic and export market growth.
Most of the conventional gas resources (around 95 per cent) are located in the Carnarvon, Browse, Bonaparte and Gippsland basins off the north-west and south-east coasts of Australia. These resources have been progressively developed for domestic use and liquefied natural gas (LNG) export.
Australia also has large unconventional gas resource potential in many basins, including CSG, shale gas and tight gas. Exploration and drilling work to explore the unconventional gas resources has been widespread around the country. Significant CSG resources have been identified in the major coal basins of eastern Australia, and are being developed for domestic use and LNG export. CSG production and LNG export have begun to play much more significant roles in the petroleum industry. All three CSG LNG projects in Queensland - Gladstone LNG (GLNG), Australia Pacific LNG (APLNG) and Queensland Curtis LNG (QCLNG) - have commenced exporting LNG. When these three LNG projects (with six trains - two for each project) are fully operational, they will have a capacity of 25 million tonnes per year. At that time, Australia will overtake Qatar as the world’s top LNG producer.
Extensive exploration drilling in onshore sedimentary basins in Australia has been carried out in the past few years. Large amounts of shale and tight gas resources (about 13 tcf of contingent [2C] resources) have been identified. More than 600 tcf of unconventional prospective gas resources have been estimated for various sedimentary basins. Gas production from shale gas resources started in the Cooper Basin in 2012. The 2C contingent resources reported for the Cooper Basin account for about 80 per cent of the total contingent shale gas resources reported for Australia.
Total identified gas resources are sufficient to enable expansion of Australia’s domestic and export production capacity, and are of the order of 279 819 petajoules (PJ) (257 tcf). This is equal to around 106 years of gas at current production rates, of which the gas reserves account for 47 years.
|Resource category||Conventional gas||Coal seam gas||Tight gas||Shale gas||Total gas|
|All identified resources||186,235||169||79,583||75||1,748||2||12,252||11||279,819||257|
Exploration work for gas resources in Australia has mostly focused on the offshore Carnarvon, Browse and Bonaparte basins, and Bass Strait for conventional resources; and on various onshore basins for CSG and shale gas resources.
At the end of 2014, Australia’s total identified conventional gas resources were estimated at 186 200 PJ (169 tcf). At current production rates, there are sufficient gas reserves (77 200 PJ; 70 tcf) of conventional gas to last another 34 years. Many offshore gas discoveries have remained subeconomic (contingent). Although gas production is projected to increase substantially, the gas reserves will also increase substantially, converted from current contingent resources with the new gas development projects. For example, the recent development of the Ichthys field in the Browse Basin has added significantly to Australia’s reserves of both gas and condensate.
The most significant conventional gas producing basins are the Carnarvon, Bonaparte and Gippsland basins. Conventional gas production has been maintained at about 2200 PJ (2 tcf) per year since 2009. It is expected that conventional gas production will increase substantially with the start-up of new LNG development projects: the Gorgon and Wheatstone projects in the Carnarvon Basin, and the Ichthys and Prelude projects in the Browse Basin.
CSG is expected to remain the most important sector of the unconventional gas industry. It is already a significant source of domestic gas and LNG exports in eastern Australia. Australia’s identified CSG reserves have grown substantially in recent years. In 2014, the CSG reserve in Australia was 45 520 PJ (43 tcf) and accounted for about 38 per cent of the total gas reserves. Reserve life is around 130 years at current rates of CSG production. More than 93 per cent of the reported CSG reserves are in Queensland; the remainder are in New South Wales. In addition to reserves, Australia has substantial contingent resources (33 920 PJ; 32 tcf) of CSG. No reserves have been reported from deep coal gas exploration.
Currently, production of CSG is mainly from the Bowen and Surat basins in Queensland, with some production from the Sydney Basin in New South Wales. CSG production has increased dramatically during the past 15 years. At the end of 2014, CSG production amounted to 13 per cent of the total gas production in Australia. It is expected that CSG production will accelerate quickly with the commencement of three LNG projects: GLNG, APLNG and QCLNG. GLNG Train 2 (which started in May 2016) is the fifth of six trains on Curtis Island to start producing LNG. With one train on the APLNG project still to complete commissioning and start-up (later in 2016), all three CSG LNG programs will move into long-term operations.
Early exploration for shale gas resources has defined 11 tcf of contingent resources. About 80 per cent of the reported contingent resources exist in the Cooper Basin. Although Santos reported first shale gas production and 3 PJ reserves from the Moomba gas field in the Cooper Basin in 2012, no significant reserves have been reported for shale gas from other sedimentary basins. This reflects the very early stage of exploration, a lack of infrastructure in the exploration areas, and low oil and gas prices.
Total contingent resources of tight gas are estimated at 44 tcf. The Perth Basin is estimated to contain about 9300 PJ (8.4 tcf) of tight gas, the Cooper Basin to contain about 10 500 PJ (9.5 tcf) and the Gippsland Basin to contain about 500 PJ (0.43 tcf). Tight gas resources in these established conventional gas-producing basins are located relatively close to infrastructure and are currently being considered for commercial production. The remainder of the contingent resources are in basins without infrastructure and so are currently not considered for commercial production.
Further opportunities for large gas discoveries remain, with the development of new technologies and play concepts, and the advance of exploration into proven basins and frontier areas. There is a strong likelihood that more conventional gas resources will be found in Australia.
At the mean expectation, a total of 125 400 PJ (114 tcf) of the yet-to-find recoverable gas has been estimated in the Carnarvon, Bonaparte, Browse and Gippsland basins (Geoscience Australia & ABARE 2010). An assessment of the same basins by the United States Geological Survey (Pollastro et al. 2012) suggested a total of 249 700 PJ (227 tcf).
Australia also has strong potential for additional unconventional gas resources, including CSG, shale gas and tight gas. Exploration for CSG has focused on two types: gas associated with shallow coal seams and gas in deep coal formations. Shallow coal seams contain the majority of identified CSG resources. Deep coal gas is being explored for in some basins for example, the Cooper and Galilee basins.
Estimates for contingent and prospective CSG resources in Queensland and New South Wales are 122 558 PJ (111 tcf) and 68 375 PJ (62 tcf), respectively (DEEDI 2011). Other Australia-wide industry estimates range from 275 000 PJ (250 tcf) to more than 330 000 PJ (300 tcf) of gas in place (Arrow Energy 2009, Santos 2009).
Known tight gas accumulations are located onshore in South Australia, Western Australia and Victoria, while contingent and potential shale gas resources are located in Queensland, the Northern Territory, South Australia and Western Australia.
Australia has significant shale gas resources, but such resources are poorly understood and quantified, and any estimates of potential resources have a high degree of uncertainty. Previous estimates include technically recoverable resources of 480 700 PJ (437 tcf) (EIA 2013), and more than 1 100 000 PJ (1000 tcf) if all prospective basins are considered (Cook et al. 2013). A recent report for the Council of Australian Governments’ Energy Council Upstream Petroleum Resources Working Group estimated 619 tcf of prospective recoverable resources for the nation (UPR 2015). The prospective resources of tight gas are estimated from low-permeability sandstone reservoirs in the Amadeus, Perth, Cooper and Gippsland basins. The Amadeus Basin is estimated to have reported the largest tight gas resources, at about 26 tcf.
Understanding of the potential tight gas and shale gas resource in Australia is limited. Likely shale gas candidate formations have been identified in many basins, including the Cooper, Perth, Amadeus, Canning, Georgina and McArthur basins. Tight gas resources are under investigation in the Cooper, Perth and Gippsland basins. A significant advantage of exploring in the Cooper Basin is that substantial gas infrastructure already exists, including a gas pipeline servicing South Australian, Queensland and New South Wales markets. However, the current low oil and gas price has largely halted the industry’s further exploration and development attempts for shale gas resources.
Geoscience Australia (GA) has assessed the potential for unconventional gas and oil in the onshore Gippsland, Otway, Perth, Cooper and Canning basins. This is a desktop assessment, using only publicly available data as inputs and following a probabilistic volumetric methodology.
Results of the assessment are quoted at confidence levels of 10 per cent, 50 per cent, 90 per cent (P10, P50, P90), and mean.
Not all of the gas will be extractable, and an estimate of 5 per cent recovery was made. This recognises two factors. Firstly, with few exceptions, there is no experience of how productive these reservoirs will be in Australia. Secondly, in the medium term (10-15 years), only a small amount of the gas-in-place could be extracted because of the very early stage of exploration and the time needed to better define resources prior to production. The assessments indicate large volumes of gas-in-place, but with a high degree of uncertainty.
The tabulated results presented here are preliminary and subject to change. These results will be updated as assessments are finalised. Final reports for these assessments will provide details of the input parameters and the methodology.
|Basin||Estimated gas-in-place (TCF)||Prospective Recoverable Gas (5% of P50) (TCF/Bbls)|
On a broadly macroeconomic level, natural gas will play an increasingly important role in meeting the world’s energy demand.
World proven gas reserves have steadily increased during the past four decades. The proven gas reserves at the end of 2014 were estimated to be around 7.2 million PJ (6607 tcf). This was equal to slightly more than 54 years of gas supply, based on the gas production in 2014 (BP 2015).
The proven gas reserves are mostly held in non-Organisation for Economic Co-operation and Development (OECD) countries (89.6 per cent of the total gas resources). Iran, the Russian Federation, Qatar and Turkmenistan together hold more than half (58 per cent) of the world’s proven gas reserves.
In 2014, world gas production was slightly more than 122 tcf, with 36.3 per cent of this from OECD countries. The United States is the largest gas-producing country, producing 25.7 tcf - more than 21 per cent of total world gas production. The second-largest gas-producing country is the Russian Federation, which produced about 20 tcf of gas in 2014 - about 17 per cent of the world’s total gas production.
Production of conventional natural gas and CSG in Australia is expected to increase significantly. When the currently developing LNG projects of Gorgon, Wheatstone and Prelude (conventional gas resources), and the six trains of CSG projects come into full operation in 2018, Australia will become the largest LNG producer in the world.