Industry News

Office Hon. Dale Wakefield

The Territory Government has released the NT’s first ever Renewable Hydrogen Strategy to turn our natural competitive advantages into clean, permanent local jobs.

As the international community seeks innovative ways to reduce greenhouse gas emissions, there is a growing demand for clean, reliable and flexible energy solutions like hydrogen.

Hydrogen has many advantages as an energy store and carrier. It can be manufactured with zero emissions, is energy dense and can be stored and efficiently transported, and it can be converted to heat through combustion or to electricity in a fuel cell, without creating any greenhouse gas emissions.

The Territory is well placed to position itself at the forefront of the developing renewable hydrogen industry with large areas of land with high solar irradiance, close proximity to export markets, an established world-scale energy production and export industry and a commitment to net-zero emissions by 2050.

There is the potential for hydrogen production, export and adoption to generate significant jobs and investment in the Territory, much of which could be in regional areas and provide opportunities for Aboriginal landowners and custodians.

The strategy outlines a five point hydrogen plan for government and industry to work together:

• Local industry development – preparing industry capabilities, logistics and supply chains to facilitate the adoption of renewable hydrogen
• Resource management – investigate how to optimise the Territory’s resources and infrastructure to facilitate hydrogen industry development
• Grow and harness demand – promote the Territory as an attractive export hub and investigate domestic hydrogen applications to build demand
• Support innovation – incorporate new ways of researching, trialling and adapting emerging technologies to optimise hydrogen opportunities
• Responsive regulation – establish effective regulatory frameworks for the development of a safe and efficient hydrogen industry

The Territory’s strategy complements the Australian National Hydrogen Strategy to develop a clean, innovative, safe and competitive hydrogen industry that benefits all Australians.

The strategy can be found at https://business.nt.gov.au/hydrogen-strategy 

Quotes from Minister for Renewables, Energy and Essential Services, Dale Wakefield

“This Labor Government understands the enormous potential our renewable energy resources have to create permanent local jobs for Territorians.

“We can be a leader in the world transition to renewable hydrogen and this strategy provides the vision and the plan to make it happen.

“The strategy complements our record of delivering more renewables, taking real action on climate change, and the strongest protections for water and our environment the Territory has ever seen.

“Only Labor has the plans and record to ensure we create local jobs and secure our unique environment for generations to come.”

 

Media Contact: Paige Nguyen 0428 727 244
paige.nguyen@nt.gov.au 

 

Independent Oversight of Hydraulic Fracturing Implementation A key part of the Government’s response to the Inquiry and the Implementation Plan is building trust through transparency. The principles of engagement, transparency and accountability are guiding our approach to implementing the recommendations. Current mechanisms for independent oversight include: Independent Overseer A key mechanism of oversight is the Independent Overseer, Dr David Ritchie. The role of the Independent Overseer is to provide the Chief Minister and NT Government with independent advice on how the implementation of the recommendations from the Inquiry is progressing and being managed. Dr David Ritchie’s role as Independent Overseer was due to expire on 30 June 2020, an extension has been granted until 31 December 2021. The Onshore Shale Gas Community and Business Reference Group The Onshore Shale Gas Community and Business Reference Group (CBRG) provides direct feedback and advice to the Hydraulic Fracturing Inquiry Implementation, coordinated by the Department of the Chief Minister. The CBRG is essential to ensure stakeholders have oversight and input into the development of the implementation framework and its subsequent execution. The CBRG’s term was due to conclude in June 2020. The CBRG’s term has been extended until 31 December 2020 and continue their oversight of Stage 3 implementation. Other targeted oversight The Aboriginal Information Program Working Group has been established to guide the implementation of Recommendations 11.5 and 11.6 and includes representatives from Land Councils, Aboriginal Areas Protection Authority (AAPA) and the Australian Petroleum Production and Exploration Association (APPEA). The Aboriginal Information Program is being designed with CSIRO to ensure Aboriginal people and communities have access to consistent, factual, relevant and easy to understand and culturally appropriate information relating to the onshore petroleum industry. A Regional Reference Group will established for the Strategic Regional and Environmental Baseline Assessment (SREBA) in the Beetaloo Sub-Basin.  The Reference Group will comprise stakeholders who live, or have interests within the SREBA region to ensure there is appropriate local and regional engagement in baseline studies and SREBA outcomes. The Reference Group will provide advice on the development and implementation of the SREBA studies within the region, engagement with local stakeholders, and communication of results and outcomes to the community.

VENTIA HOLDINGS will rebrand subsidiary Broadspectum after it acquired the company from Ferrovial for A$485 million, a deal that closed last week.

Ventia's acquisition of Broadspectrum - a major contractor in the oil and gas and renewables sector - was approved by the Australian Competition and Consumer Commission in April. The deal was first announced in December last year.

Broadspectrum will soon be known as Ventia, joining its parent company, which is itself a 50-50 joint venture between construction giant CIMIC and Apollo Global Management.

The company holds service contracts for BP's Kwinana refinery, Shell's QCLNG venture and with Inpex for the Ichthys LNG project in the Northern Territory.

Broadspectrum also owns Easternwell, a major drilling contractor in Australia.

The combined group was expected to generate revenue in excess of A$5 billion when it was first announced, however the COVID-19 pandemic and oil price crash may affect this.

CIMIC, the 50% owner of Ventia, also owns service business UGL - another major oil and gas contractor - which it acquired through a hostile takeover about four years ago. 

The acquisition of Broadspectrum gives CIMIC, through Ventia, an even bigger slice of the services business. 

Source: Energy News Bulletin

THE National Offshore Petroleum Titles Administrator has approved Santos’ application for a production license offshore Northern Territory for its Barossa field, despite project sanction now left open ended. 

Santos has held the title since 2012 as a retention license renewing the initial five-year term in October 2017 and was approved to transition to a production license Friday after its application March 27. 

The 841sq.km field is in the Bonaparte Basin and contains 10 blocks.  

Barossa was due for final investment decision in the June quarter and would be destined as backfill for the Darwin LNG plant as the current Bayu Undan field goes into decline. 

"Barossa remains an important project for Santos due to its brownfield nature and its low cost of supply," managing director Kevin Gallagher said March 23 when he announced the company had delayed sanction thanks to market conditions.  

It said then it would cut spending by almost 40% this year, making it then the second major ASX-listed oiler to revise guidance.  

Santos will lower its capital expenditure this year by $550 million and will cut $50 million from cash production costs.  

Though DLNG was always due to be shut in before development of Barossa that delay is now expected to be longer, hitting Australia's forecast future LNG exports.  

In October it announced it was taking a larger share of the assets it already shared with ConocoPhillips for a total of $1.4 billion, but would sell down 25%  interest in Bayu-Undan and DLNG to SK E&S for $390 million, giving the latter a larger stake.  

The sale completed in late May for a revised down price of US$1.25 billion.  

However the deal also saw an increased contingent payment of $200 million on sanction of Barossa, up from an original $75 million. 

The National Offshore Petroleum Safety and Environment Management Authority greenlit the Barossa pipeline development in early March. 

Source: Energy News Bulletin

AUSTRALIA’s leading petroleum industry body has hit back at Territory Alliance leader Terry Mills’ promise to ban fraccing in the jurisdiction if his fledgling party wins a balance of power in the upcoming election in late August. 

Mills is a former Chief Minister and was pro-fraccing when in power but has since swung in a 180 to attack the practice, suggesting it is not supported by a majority of Territorians and that the government has already over $94 million subsidising the gas industry with no return. 

He has said "Access Economics have identified nearly $100 million of NT taxpayer money already spent on this with no return".  

Mills published a public letter in late June which said "there is no social license for fraccing". 

 "No more production permits will be issued, existing exploration licences will not be renewed and current operations will be subject to tough community and environmental safeguards," Mills wrote.  

The Australian Petroleum Production and Exploration Association sent its own four-page letter to Mills Tuesday outlining the benefits of the gas industry, its centrality to Top End power supply and contesting many of the allegations he has made.  

"Even if the government did spend $94 million subsididing the industry, some of it would have happened on his watch," APPEA Northern Territory director Keld Knudsen told Energy News today.  

"Back of the envelope calculations we've done actually suggest industry has spent $500 million already onshore," he said.  

APPEA maintains the report the former chief minister refers to is not from Access Economics but rather one commissioned by anti fraccing group Lock the Gate and prepared by think tank The Australia Institute.  

The letter says that the Access Economics report it has read said "a report by that consultancy in relation to NT gas found that contrary to your assertions, a successful onshore gas development could provide a boost to the NT economy of over $17 billion over 20 years, and an additional 4,000 jobs under their "success" scenario".  

That is far from "no return" were wells in the frontier Beetaloo Sub-basin successful.  

"It's $94 million over ten years on anything related to gas. There was some research around diesel-to-gas. It's clearly not a subsidy," Knudsen said today.  

Currently Santos and Origin Energy are the largest players in the Beetaloo, however Empire Energy also holds a vast swathe of leaseage across the region.  

Until now, the Michael Gunner Labor government has been very supportive of the oil and gas industry, moving to slash red and green tape in an effort to boost exploration and keep the domestic economy afloat.  

In May the Territory government announced a new Economic Reconstruction Commission, headed up by leading business figures, to slash red tape, create jobs and attract investment from the oil and gas sector. 

Source: Energy News Bulletin

Read more here

AUSTRALIAN oil and gas explorer Empire Energy has selected the location for its first well in the frontier Beetaloo sub-basin, in the Northern Territory.

ASX-listed Empire Energy has selected a drilling contractor, picked its well site for Capentaria-1, ordered necessary equipment, and finalised the well design. 

The announcement today saw the company's shareprice jump more than 4% to 25.5 cents per share. 

It plans to spud the well in exploration permit EP187 in the third quarter, despite challenges posed by COVID-19 restrictions and a volatile market. 

Carpentaria-1 will be drilled to a depth of 2900 metres and target the Velkerri Shale and Kyalla Shale formations. While the Velkerri has already proven to hold dry gas elsewhere, the Kyalla which is the secondary target could hold liquids. 

The well aims to identify and prove up the thickness of the shales. 

Currently Empire believes its well will hit up to 600m of Velkerri shale and a 100m interval of the Kyalla shale. 

Once drilled, it will be fracced and tested. Data from the well will be used to design an appraisal program slated for next year, with a view for short-term production. 

It is expected the drilling, completion and evaluation of the well will take around 45 days. 

Over the last two or so years, Empire have pivoted away from US onshore exploration, to focus solely on Australian domestic opportunities. 

The company believes the Beetaloo basin will play a "key role in opening up Australian supply of domestic energy." 

"We are really excited to replicate the US shale boom here in Australia," managing director Alex Underwood told Energy News. 

Recently, independent oil and gas research firm Netherland, Sewell & Associates estimated Empire's entire portfolio, which spans 14 million acres, now holds a combined 13.46 trillion cubic feet of gas on a 2U best estimate basis. 

Within EP187 Netherland, Sewell & Associates, estimate a 2U prospective resource of 2.4 Tcf

Source: Energy News Bulletin

Read more here

Community and Business Reference Group meet for the seventh time

The Onshore Shale Gas Community and Business Reference Group (Reference Group) held its seventh meeting in Darwin on 2 June 2020.

Established to provide a forum for government to seek advice and share information, the Reference Group received updates on:

• progress of the Framework for Strategic Regional Environmental Baseline Assessments (SREBA); including the outcomes of public consultation on the draft Framework which were completed in early 2020, and plans to form a regional reference group for the development of the SREBA in the Beetaloo Sub-Basin
• draft Offsets policy related to the Environment Protection Act 2019, which was released for public comment at the end of 2019
• status of Environmental Management Plans (EMPs) currently under assessment by the Department of Environment and Natural Resources (DENR)
• development of the Gas Service and Supply Plan, including actions to grow the service and supply industry, and grow Territory research and innovation and training. The Plan is available online . 
• work underway for the Aboriginal Information Program to address recommendations 11.5 and 11.6

The Reference Group also discussed the ongoing mechanisms for oversight of Stage 3 of the Implementation Plan and noting the term of the CBRG was set to conclude on 30 June 2020, requested Government consider extending their term for a further 6 months till 31 December 2020.

The Reference Group noted that as at 30 April 2020, and as per the 6-monthly update, 60 of the 135 recommendations have been fully completed, 71 have commenced, and four are yet to commence.

For full details of the meeting and to read Communique 7 PDF (165.2 KB) . 

Office Hon. Dale Wakefiled

The Territory Labor Government’s target of 50% renewables by 2030 is delivering local jobs and cheap, clean power.

Following the installation of Titjikala’s new 400kW photovoltaic solar array, the community will now have its energy future transformed through a new 970kWh battery energy storage system (BESS).

Titjikala is the second remote community in the Territory where energy generation costs will be significantly reduced because of the Territory Labor Government’s investment in solar and battery technology.

The BESS will save approximately 156,000 litres of diesel annually. Not only will the diesel engines be turned off during daylight hours, but excess solar energy generated will be stored for overnight use. The engines will start up again overnight when the BESS is depleted.

The BESS will also have significant environmental benefits for the Titjikala community. There will be cleaner air through cleaner power, less traffic on the roads from heavy vehicle diesel delivery trucks, and reduced noise from diesel engines.

The Titjikala BESS project will cost an estimated $950,000. The investment is expected to be repaid from savings within five years and the project is expected to be completed by early 2021.

Titjikala’s solar array installation was part of the Solar Energy Transformation Program (SETuP), which is Australia’s largest rollout of solar power to remote communities.                                                                                                                    

SETuP was a $59 million program co-funded by the Territory Government and the Australian Renewable Energy Agency (ARENA). The program was rolled out to 25 sites across the Territory.

Quotes from Minister for Renewables, Energy & Essential Services, Dale Wakefield

“The Territory Labor Government is delivering more renewables because we know it means cheaper, cleaner power and more jobs.

“We are not just investing in our major centres, but we are also investing in our remote communities and ensuring that we are delivering cheaper and cleaner power for ALL Territorians.

“We have made significant progress towards our target of 50% by 2030 with renewables projected to reach 16% by the end of 2020 – up from 2% in 2016.

“These reforms and the significant progress we’ve made would be put at risk by a CLP or Terry Mills Government.

“With the CLP continuing to claim renewables are a hoax, and Terry Mills promising less renewables, only Labor has the record and policies to secure a renewable future for the Territory.”

Media Contact: Paige Nguyen 0428 727 244
paige.nguyen@nt.gov.au 

Natural gas will have an important role to play in a low emissions future and will be a key partner in Australia’s renewable energy supply chain. Already considered a ‘clean’ fuel, natural gas produces the least amount of carbon dioxide of all fossil fuels. However, what many people don’t realise is that natural gas will also have a prominent role in the development of Australia’s new hydrogen industry. 

Learn more.

APPEA recently released a report undertaken by energy research and consultancy Wood Mackenzie. The report highlighted that the industry’s success from 2009 to 2012 was predicated on relatively few regulatory and fiscal changes in the previous decade, which provided a strong foundation for a wave of unprecedented investment.

The scale of this investment, including the establishment of LNG projects in the Territory was worth approximately $350 billion Australia wide and has delivered direct and indirect economic benefits to the Australian economy.

In the immediate term, the benefit has come from direct spending into local communities while the full taxation benefits to be accrued in the latter half of this decade.

Wood Mackenzie Vice President Energy Consulting, Asia Pacific Chris Graham said: “Our analysis found the stability of the regulatory and fiscal environment in the years prior to investment was key to oil and gas majors with strong balance sheets and development capability making long-term commitments to the country.

“However, against the backdrop of a challenging macroeconomic environment and lower commodity prices, Australian fiscal and regulatory volatility has increased at a time when continued stability would be highly beneficial.”

While focused on the oil and gas industry, the findings also show regulatory instability, intervention and uncertainty, coupled with Australia being considered to be a high-cost destination for business, has reduced the investment appetite, is also relevant for many other industries in the Territory.

The Territory has an opportunity to secure a new wave investment in gas and stable regulatory and fiscal environment is crucial for recovery.  While the report was completed prior to understanding the full impacts of COVID-19, and the decline of the oil price, it remains relevant as Australia shifts focus to economic recovery and global reintegration.

A lack of investment will have economic flow-on effects to communities and businesses we work with, making it counter-productive to the economic recovery phase that this country will need to embark on.

A copy of the report can be found here. 

https://www.appea.com.au/wp-content/uploads/2020/05/Australia-Oil-and-Gas-Industry-Outlook-Report.pdf