(EnergyAsia, March 29 2011, Tuesday) — Australian natural gas production increased 5.1% from 1,902 petajoules (PJ) in 2009 to a record 1,999 petajoules in 2010 due to rising global demand for the country’s liquefied natural gas (LNG) as well as growth in domestic gas-fired power generation, said analyst EnergyQuest.

In a study, the Australian firm said the value of the country’s LNG exports also set a record of A$9.462 billion, up 24% from A$7.631 billion the previous year. LNG production rose 6.2% last year from 18.6 million tonnes per year (t/y) in 2009 to 19.8 million t/y, due to production from the “fifth train” of the North West shelf. (US$1=A$0.98).

EnergyQuest said domestic gas production increased 2.7% in 2010 to a record 1,060 PJ compared with 1,032 PJ the previous year, and natural gas production rose 4.4% to a new high at 687 PJ on the country’s east coast, where coal seam gas production rose 43 PJ to a record 222 PJ.

Gas consumption in eastern Australia increased 8.8% to a record 713 PJ in 2010 (higher than production due to run-down of storage), with gas use for power generation growing 28 PJ for the year to 209 PJ. Total Queensland state gas consumption is estimated to have been 213 PJ, with growth of gas use for power generation rising by 35 PJ.

Graeme Bethune, EnergyQuest chief executive officer, said:

”The LNG momentum looks set to continue in 2011. So far this year we have already seen another Gladstone LNG project, GLNG, in central Queensland, reaching sanction and the ConocoPhillips/Origin Energy APLNG project, also situated at Gladstone, reaching major milestones. Altogether there are seven Australasian LNG projects aiming for final investment decisions in 2011, with combined capacity of around 40 million t/y.

“In contrast to LNG, there is no line-up of gas-fired electricity generation projects rushing towards sanction. There are many plans and approved sites but not much action, partly due to low electricity prices and ongoing and heightened uncertainty about carbon pricing.

“The Federal government has now announced it is pressing ahead with a carbon pricing scheme from 2012, but with many qualifications and not many details. The issues here are whether there will be sufficient progress with climate policy this year to provide the certainty investors need to go ahead, and if not, what the consequences might be of continuing stalled development.”

Mr Bethune added that one of the welcome developments during 2010 was the turnaround in Australian oil production.

“After slumping to a 40-year low of 99 million barrels (MMbbls) in 2009, production grew to 16.2% to 116 MMbbls in 2010. This was due to production from the Pyrenees, Van Gogh and Vincent oil fields, all situated off the north-west Western Australian coast.

Reflecting the contribution made by these fields, Apache Energy and Inpex moved up to third and fifth places respectively in the league table of Australian oil producers.”

Other highlights of the EnergyQuest study include:

Australian petroleum production increased by 6.3% in 2010 to a record 520 million barrels of oil equivalent (Mmboe), from 489 Mmboe in 2009.

Oil production grew by 16.2% off the back of the worst annual production level in 40 years (99 MMbbls) in 2009.

Oil and natural gas liquids reserves (2P) were essentially flat, as were conventional gas reserves (although conventional gas reserves grew strongly in 2009 with the sanctioning of the offshore Western Australia Gorgon project). However 2P coal seam gas reserves grew by just over 9,000 PJ to reach 35,246 PJ as LNG proponents built up their 2P reserves.

Adelaide, South Australia-headquartered EnergyQuest’s oil and gas production and reserves estimates are compiled from a comprehensive database of company reports and are published in the company’s EnergyQuarterly.