THERE is no silver bullet to Australia’s current domestic economic woes, but federal minister Karen Andrews today reiterated the federal government’s intentions to remove environmental red tape and put the pedal to the floor for future oil and gas development.

In a speech to the National Press Club today the minister for Industry, Science and Technology Andrews acknowledged the severe hit business had taken to investment due to the coronavirus pandemic. 

While the minister's carefully curated oration focussed on building the manufacturing sector, gas and energy were a key component to her remarks. 

Andrews said energy and technology was a "national priority" and would underpin Australia's manufacturing sector and domestic economic recovery. 

She said she was working "closely" with resources minister Keith Pitt and energy minister Angus Taylor to ensure affordable gas prices for the manufacturing industry and flagged a comeback of affordable steel production and exports as an underlying area of domestic economic recovery. 

"I am at the consumer end. For Australian manufactures I want to make sure they get the best energy prices they can."

Specifically, Andrews flagged a revival of Australia's steel manufacturing sector, despite a global oversupply of steel. 

This would rely on affordable electricity and gas prices, and the government is not yet considering hydrogen, according to Andrews. 

Hydrogen-led ‘green steel' is one idea put forward by centrist think tank the Grattan Institute to drive Australian green jobs and manufacturing while replacing those lost from retirement of coal mines. 

"We need to ensure our steel manufacturers are getting the best energy costs. Energy is a critical input to them. I encourage them to look at how they are going to minimise their energy costs, but hydrogen [is still in early stages]" Andrews said. 

The minister said she understood business was investing heavily in the future energy source, but Australia was a "resource rich nation" and the government was already looking at "how and if" hydrogen could become an export further down the track. 

"Hydrogen is something we are investigating… but it is something a number of years away and it won't be in place for several years to come." 

Instead, Andrews is betting on natural gas being the primary feedstock for manufacturers. 

The minister used her speech to spruik the government's plans to further reduce the price of gas in wholesale markets, saying "cheaper gas" and "reduced cumbersome red tape" would benefit business and improve access to export markets by making products like steel cheaper. 

Source: Energy News Bulletin

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Background

• The NT Onshore Gas Support Industry – Statement of Capacity is now available in hardcopy
• This report supports the NT Gas Service and Supply Plan which was released in March (link here: https://business.nt.gov.au/publications/strategies/gas-service-and-supply-plan)
• The Service and Supply Plan aims to maximise opportunities for NT service and supply businesses in the oil and gas sector, and will help businesses adapt to the dual impacts of the oil price shock and COVID-19.
• The Plan has three key focus areas:

1)    Strengthen the commitment to local content by gas operators and contractors
2)    Grow local workforce and business capability
3)    Strategically develop the service and supply ecosystem

• This Statement of Capacity is a significant step towards delivering opportunities for the NT service and supply sector.

Key Messages

• The NT Onshore Gas Industry Statement of Capacity:
• • Is a forward-looking assessment of the potential demands of an onshore shale gas industry in the NT,
  • identifies the capacity of the NT service and supply sector to meet the needs of a future NT shale gas industry, and
  • identifies gaps in capacity and opportunities for NT businesses to work proactively to prepare for a future onshore shale gas industry.
• A corresponding offshore industry statement of capacity will be released shortly, which has measured actual operational spend on the LNG projects serviced out of Darwin Harbour and the potential for NT companies to compete for a greater slice of the service and supply pie.
• The Northern Territory Government remains committed to achieving its visions for a world-class gas production, manufacturing and services hub by 2030.

For more information, contact:

Sean Reddan

Principal Industry Development Officer, DTBI

 sean.reddan@nt.gov.au

m: +61 436 613 179 

Empire Energy also in talks to secure drilling rig for delayed exploration well as it prepares to resume operations in Australia's Northern Territory.

Australian junior Empire Energy has received a boost for its Northern Territory exploration prospects, with Netherland, Sewell & Associates, Inc (NSAI) carrying out an independent assessment of its Beetaloo sub-basin and McArthur basin acreage.

The assessment by NSAI places the best estimate prospective gas resources across Empire’s acreage at nearly 13.5 trillion cubic feet and placed the overall best estimate prospective resource volume at nearly 2.3 billion barrels of oil equivalent.

“This is a substantial resource for a company of our size. The results of Empire’s recent 2D seismic program have enabled NSAI to evaluate prospects in EP187 which have a best estimate prospective gas resource of over 2.3 Tcf in the Velkerri Shale and 14 million barrels of oil equivalent in the liquids rich Kyalla shale,” Empire managing director Alex Underwood said.

“This represents a near doubling of Empire’s Velkerri shale independent prospective resource estimate and is the first time that the Kyalla shale has been independently assessed as a prospective resource in our properties. The plays evaluated by NSAI in our McArthur basin properties have substantial resource potential.”

Empire added on Monday that it was working with the Northern Territory and the Northern Land Council to resume its work programme activities in the Northern Territory, which had been hampered by the Covid-19 pandemic. 

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THE FEDERAL government has passed key legislation covering many areas of the upstream oil and gas industry, ranging from regulatory powers and levies, to the future of carbon capture and storage developments.

All amendments to the Offshore Petroleum and Greenhouse Gas Storage Act 2006 proposed by the government were finally accepted this week, after many months of debate. 

Separate amendments by Centre Alliance senator Rex Patrick failed, as did an amendment by Greens senator and anti-oil and gas campaigner Sarah Hanson-Young. 

The former wanted to see an amendment to stop multiple extensions to exploration permits for companies holding acreage in Commonwealth waters in the Great Australian Bight while the latter wished to see a moratorium imposed on any future drilling or exploration. 

The government's legislation came in a series of Bills, one focused on the role of the national regulator and oil and gas boundaries, and another paving the way forward for CCS and hydrogen exports, finally formally moving the role of overseeing offshore CO2 storage to the offshore oil and gas safety and environmental regulator NOPSEMA from the Department of Industry and Innovation. 

REGULATORY CHANGES TO NOPSEMA

The Senate voted in favour of overhauling offshore oil and gas regulations to give the national environment and safety watchdog a new, sharper, set of teeth. 

The National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) has been given powers to enforce penalties and issue directions to operators in state waters, should an Oil Spill Emergency occur. 

Source: Energy News Bulletin

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PERTH-based GR Engineering told the market this morning its subsidiary Upstream Production Solutions had been awarded a longer-term contract from the federal government to watch over the Northern Endeavour FPSO offshore Western Australia.

The Northern Endeavour lies inert in the Commonwealth waters of the Timor Sea. The vessel is now in ‘lighthouse' mode and not producing from the Laminaria-Corallina oilfields after its owner Northern Oil and Gas Australia (NOGA) ran out of money and was declared bankrupt. 

The federal government intervened when NOGA went into liquidation, with more than $100 million owing, appointing UPS as the operator of the ageing vessel. UPS previously held the contract when the offshore regulator shut the vessel down over safety concerns, forcing NOGA into administration. 

Today UPS parent company GR Engineering announced it had been given a longer-term contract which will end on October 31 this year to effectively watch over the vessel.

"We are pleased to continue working with the Department and relevant regulatory bodies to safely operate and maintain the Northern Endeavour FPSO whilst it remains in a non-producing state under the Northern Endeavour Temporary Operations Program," GR Engineering managing director Geoff Jones said. 

The contract is expected to be worth approximately A$32 million with money coming directly from the public purse. 

NOGA's fiasco has been an embarrassment for the Australian oil and gas industry, and new federal resources minister Keith Pitt has not held back, labelling the situation a "wake-up call" to industry on his first day in Cabinet in February after he replaced Matt Canavan. 

Canavan, despite seeing himself as friend to both industry and all hydrocarbons great and small, was adamant tax payers should not bear the cost but rather industry should chip in, something which horrified peak lobby body APPEA. 

Source: Energy News Bulletin

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THE Northern Territory Labor government has thrown nearly $12 million at the oil and gas sector in the hope it can fast-track onshore exploration, and thus save the domestic economy.

Treasurer Nicole Manison today released the government's quarterly fiscal report, which showed a deficit of $540 million, and said she made "no apologies for doing whatever it takes to protect Territorians." 

As part of the government's recovery plan post COVID-19, it had brought forward $11.79 million worth of funding for oil and gas explorers and producers to encourage investment. 

The cash will be made available through the Strategic Regional Environmental Baseline Assessment program. 

Treasurer Manison said the costs would be "recouped through cost-recovery arrangement with industry."

"The March quarterly financial figures showed the government budget remained on track for the 2019/20 financial year until the COVID-19 global crisis emerged," Manison said. 

"In response to the COVID-19 pandemic Government took swift and decisive action to save lives and to save jobs.

Manison said the wad of money would provide "funding certainty" for the oil and gas industry. 

She also noted the government remained committed to implementing the Hydraulic Fracturing Recommendations from the scientific inquiry into fraccing which led to the lifting of the fraccing ban in the NT. 

According to the government's website it is only 41% complete in introducing promised fraccing regulations. 

The Michael Gunner-led Territory government has delayed its own budget, following the federal government's decision to suspend its own. The next NT budget will be in November this year. 

Source: Energy News Bulletin

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ENI may sell its Australian assets, according to sources speaking with the Australian Financial Review, with possible buyers including Beach Energy.

Beach does not have any Darwin or offshore Northern Territory assets, or a position in an LNG export facility but does have experience in offshore gas and domestic gas plants and already partners with Santos, which has a large share of Darwin LNG, which the Italian company has a minority stake in.  

Eni also has the undeveloped Evans Shoal field, which it took operatorship of in late 2017. 

Beach's last large purchase was Origin Energy's upstream vehicle Lattice Energy in 2017, and it has spent the past two years pursuing largely organic growth options. 

It farmed out a large stake of its offshore Otway position in Victoria in 2019 to OG Energy. 

APA Group is apparently another targeted buyer, though nothing was mentioned during the pipeliner's online investor briefing day last week. 

"Sources said Eni... and its bankers at Citi had pitched the portfolio as defensive in nature and said they were sheltered from global oil prices, which analysts expect to be low for months or years to come," the Fin said. 

All the Italian company's Australian assets are gas, including the Blacktip gas field which goes to Darwin's Yelcher gas plant and its 11% stake in DLNG and the declining Bayu Undan field which feeds it. 

Source: Energy News Bulletin

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Today the Western Australian environmental watchdog gave the all-clear to what will be the world’s biggest hybrid wind and solar hub.

In an Australian first, the Asian Renewable Energy Hub in the Pilbara region of WA will transfer energy via a lengthy subsea power cable to Singapore and produce green hydrogen at an "oil and gas scale" for export. 

"Having assessed the proposal, the Environmental Protection Authority recommends the proposal may be implemented subject to conditions," the state EPA said this morning. 

The project  will cost more than A$22 billion and is being led by a consortium spearheaded by Danish wind turbine manufacturer Vestas, US-based Intercontinental Energy and Macquarie Bank. 

The Asian Renewable Energy Hub will cover 6500 sq.km of land and is expected to generate more than 15 gigawatts of renewable energy in northern WA. 

Around 3GW of energy generated is earmarked for industrial users in the Pilbara, including miners and mineral processers. 

However, the bulk of the power generated will be used to produce green hydrogen for export markets, and directly exported through a subsea pipeline to Singapore. 

Four export cables will run across the seabed and through the Eighty Mile Beach Marine Port, for direct energy export to southeast Asia. 

It has taken six years to get to this stage, after project development studies began in 2014. 

Last year the project was given priority ‘Major Project' status by the state government. 

The A$22 billion hub will be constructed in phases over the next ten years and when complete will consist of 1,743 wind turbines with a generating capacity of 7.5 gigawatts and a 644,600 hectare 3.5GW solar plant generating more than 40 terawatt hours of electricity a year. It would also produce green hydrogen.

The project, some 220km east of Port Hedland, is being backed by CWP Energy Asia, InterContinental Energy, Vestas and Macquarie Group.

The developers are aiming for first exports of hydrogen by 2027. 

Once fully operational the hub will have a life span of more than 50 years. 

WA environment minister will have the final say on whether the project goes ahead.

Source: Energy News Bulletin

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THE Australian Renewable Energy Agency has launched A$70 million green hydrogen fund to help fast track the development of the gas to help Australia reach its goal of producing it for under $2 per kilo, or “H2 under 2” by 2030.

The funding round will support two or more large scale renewable hydrogen projects, with electrolysers of a minimum of 5 megawatt capacity, with a preference of 10MW or larger, which would make them some of the largest electrolysers in the world, according to ARENA. 

Electrolysis is the process in which water is split into hydrogen and oxygen, a process which when done by using renewable energy is emission free, however the technology has yet to be scaled up. 

Unlike other parts of the federal government's National Hydrogen Strategy, each project must be powered by renewables, either directly or through power purchase agreements or large-scale generation certificates. 

Shortlisted projects will be invited to submit full applications later this year ARENA said. 

"This $70 million funding round will help demonstrate the technical and commercial viability of hydrogen production at a large-scale using electrolysis," energy and emissions reduction minister Angus Taylor said in a statement this morning. 

In a similar vein to his other slogan on negotiating energy funding arrangements with the states, or "no gas, no cash", Taylor has adopted the mantra of "H2 under 2". 

"That's the point where hydrogen becomes competitive with alternatives in large-scale deployment across our energy systems," he said.  

Taylor pointed out the ways hydrogen could be used to decarbonise hard-to-abate industries, including heavy transport, ammonia production, blending hydrogen into existing local natural gas networks, as well as the export value of shipping it to trading partners like Japan and Korea. 

"Getting costs down will be key to establishing Australia as a world leader in the hydrogen sector," Taylor said.  

ARENA has already committed over $55 million in funding to support pre-commercial activities including power to gas and renewable ammonia and has invested in feasibility studies for commercial-scale deployments of hydrogen including Dyno Nobel, Queensland Nitrates, Yara and Stanwell.

"We've supported a range of feasibility studies and pilot projects over the past two years, but now we need to start the journey of producing hydrogen at scale," ARENA CEO Darren Miller said. 

"Through this round, ARENA aims to share knowledge on technical and commercial parameters for commercial-scale renewable hydrogen production for domestic and international markets."

Australia is joining the global race to scale up renewable hydrogen, with several demonstration projects underway. 

Source: Energy News Bulletin

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Due to the COVID-19 pandemic, the APPEA Conference and Exhibition, originally planned for May 2020, has been postponed to June 14-17, 2021 at the Perth Convention & Exhibition Centre in Western Australia.

The APPEA Conference and Exhibition is the largest annual upstream oil and gas event in the southern hemisphere, attracting thousands of delegates from across the country and around the world.

The conference’s technical and business papers already submitted will be published in the 2020 APPEA Journal (to be released in May, further information will be advised in due course).  Other elements of the Conference and Exhibition will however be postponed to the new date in 2021.

APPEA will contact all stakeholders including speakers, delegates, exhibitors and sponsors directly to advise of their options moving forward.

APPEA Chief Executive Andrew McConville said while the industry’s current focus was meeting the personnel, operational and community challenges posed by the COVID-19 pandemic, APPEA was committed to maintain its engagement with members, industry stakeholders and the broader community.

“Our industry’s first priority is the health and safety of our people, then ensuring vital energy supplies are maintained and we will continue to highlight the critical role we play in underpinning Australia’s economic and social well-being,” Mr McConville said.

“Next year, we are excited that we will be able to celebrate the APPEA Conference’s 60th anniversary in Perth.

“Such events are critical for the industry to stay informed, do business, find solutions to challenges and find pathways to opportunities.

“So, rest assured, we will be back – bigger and better than ever.”

APPEA’s national conferences and state-based events are a key part of APPEA’s support for the industry, and the association will continue to adapt to the circumstances to keep everyone informed and connected.

APPEA is also currently planning a webinar series for members and stakeholders.

For further information and updates, visit www.appeaconference.com.au