Western Australian gas

Western Australia ranks amongst the best areas in the world for petroleum exploration and development. Not only does it possess world-class gas resources, it also has a proven track record for developing world-scale, technically complex projects.

This started in the 1980s with the development of the North West Shelf project – a project that put Western Australia at the forefront of LNG development in Australia. At the time of its development, the North West Shelf was the largest LNG project in the world. Later this year the project will celebrate two important milestones – 30 years of supplying domestic gas and 25 years of LNG exports.

As development has increased, so too has the importance of LNG to the global energy mix. Nations around the world are seeking to balance growing global energy demands with environmental expectations as they move to lower emission fuel sources. LNG is helping to balance those needs.

In 2012, Pluto became Western Australia’s second LNG project to start production. This saw a noticeable increase in LNG output for Western Australia in 2013 and LNG became Western Australia’s second-most valuable commodity, behind only iron ore. Output increased to a record 19.2 million t and LNG sales were valued at AU$ 13.3 billion, an increase of 18% on the previous year.

In terms of a global perspective, Western Australia currently exports 6.3% of the world’s LNG exports, with more than 3500 cargo exports since 1989.

Western Australia’s significant contribution to the world’s LNG supplies looks set to expand into the future. By 2017, Australia is expected to produce 87 million t of LNG, ranking it above Qatar as the world’s leading LNG exporter. 

During the same period, Western Australia will more than double LNG production from 20 million t to 50 million t. This equates to 57% of Australia’s expected total production up to 2017. Such increasing production will be driven by the completion of the massive Gorgon and Wheatstone projects. However, it is not just production that is increasing; so too is the amount spent on exploration.

Exploration in Western Australia

Western Australia features extensive areas of petroleum bearing sedimentary basins. Its offshore basins alone are nearly four times as large as the North Sea and there is still much to be discovered. In 2012 - 2013, AU$ 4.7 billion was spent on petroleum exploration in Australia. More than AU$ 3.2 billion of that was spent in Western Australia and its offshore waters.

Offshore basins continue to attract the majority of petroleum exploration expenditure in Australia. However, onshore exploration expenditure rose to 28% of the total amount spent in 2012 - 2013. This is with good reason. As substantial as the State’s offshore LNG resources are, there is even more potential onshore.

Shale and tight gas

Western Australia has an estimated potential of 280 trillion ft³ of recoverable natural gas from shale and tight rock. To put this figure into perspective, it is more than double Western Australia’s known offshore reserves. This potential has already attracted interest from major players such as Buru Energy, Mitsubishi Corp., ConocoPhillips and Hess. If these estimates are proven, natural gas from shale and tight rock presents a remarkable opportunity for Western Australia.

However, opportunity alone is not enough. Most people would be aware that there has been some fairly unflattering media coverage surrounding the development of shale and tight rock gas resources. This coverage has not been isolated to one particular state or country, but rather has been seen in a number of jurisdictions around the world. Much of the coverage surrounds the issue of hydraulic fracturing, or fracking, as it is also known. Community confidence in this emerging sector will be critical. This is why it is essential to ensure that companies and the community have a clear understanding of what is required to responsibly develop Western Australia’s resources. 

Written by Jeff Haworth, The Department of Mines and Petroleum, Australia. Edited by Callum O'Reilly

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