From AFR today written by Angela Macdonald-Smith under heading of "Fresh hope for fringe gas fields".
Forgive me for spelling mistakes.
New technology and higher LNG prices mean fields found 40 years ago may now be developed, writes Angela Macdonald-Smith.
Will all forecasts pointing to a sustained pick-up in liquefied natural gas demand in Japan on the back of it nuclear power crisis, things are looking up for Australia's estimated $1 trillion worth of gas held in marginal deposits. The government puts estimates of so-called stranded gas - fields considered too small or distant to be profitable depeloped - at uup to 140 trillion cubic feet (tef), more than a third of the total. But progress in technologies, such as floating LNG (FLNG), together with higher oil prices and rising Asian gas demand should give a leg-up to efforts to develop those deposits, some of which have lain fallow for decades. Resources Minister Martin Ferguson's tougening-up of the "use it or lose it" stance on licences for undeveloped fields should also ensure quicker commercialisation of deposits when an economic case can be made. "The days when companies can sit of a gas resource without really making a concerted effort to examine all options to monetise it are rapidly drawing to a close," said Jurgen Hendrich, managing director of MEO Australia, which wants to develop methanol and LNG projects tapping undeveloped deposits in the Timor Sea. Royal Dutch Shell is due within months to give the go-ahead for what could be the world's first venture to produce LNG from a floating ship, paving the way for the development of other smaller gas deposity far from shore. The Prelude project in the Browse Basin, costing up to $10billion, will tap about 3 tef of gas resources within Shell's Prelude and Concerto fields. The volume of gas - much smaller than, for example, the 40-plus tef of gas underpinning Chevron's Gorgon LNG venture - and the field's location more than 200 kilometres from the West Australian coast mean the deposits would otherwise lie undeveloped. In a recent briefing, Shell chief infancial officer Simon Henry was enthusiastic about the prospectus for proceeding with the Prelude this year, with the Sunrise field in the Timor Sea earmarked as the next candidate for FLNG. He described the technology as "a great strategic tool to have in the toolbox for relatively small discoveries a long way from shore that are difficult to bring into a bigger scheShell is considering other potential FLNG projects in Australia, Indonesia, elsewhere in Asia and off sub-Saharan Africa. Australia's northern waters alone could host as many as seven FLNG projects in production or development within 10 years, according to Northern Territory Resources Minister Kon Vatskalis. Santos has linked with France's GDF Suez for a FLNG project at the Petrel and Tern fields in the Bonaparte Basin, off Darwin, in an effort to drive commercialisation of gas found as long ago as 1969. But a solution has yet to be found for the nearby Caldita and Barossa fields held by Santos and Conoco Phillips. Thailand's PTTEP, Inpex and Oslo-listed Flex LNG have al proposed FLNG plants in waters off Australia in the past two years as the technology has advanced. Technological progress also opened up Queensland's vast coal-seam gas fields for development at deposity that were considered stranded back in the 1990's. But techology is just one factor that helps transform stranded gas into a commercial development to meet either export or domestic demand. "It's a question of price and the overall supply-demand balance situation," Graeme Bethune, chief executive of Adelaide-based energy economics EnergyQuest, said. Off the south-east coast, the Kipper field, found in 1986, was for decades considerd uncommercial but is now under development. Off Western Australia, development of BHP Billiton's Macedon and Apache Reindeer deposits only began more than 10 years after their discovery, prompted by higher prices and rising domestic demand. Woodside's Browse LNG project, set for a mid-2012 go-ahead, will tap fields found as long as 40 years ago. Australia's biggest gas field still to be lacking a development plan is the 8tcf Scarborough field found 30 years ago, 300 kilometres of the West Australian coast. Owners Exxon Mobil and BHP have rejected the floating option and are nearing a decision on an onshore plan. But domestic gas and LNG were not the only options for stranded gas, said MEO's Mr Hendrich, who believes methanol offers an attractive alternative for filds in the Timor Sea that hold gas with a higher concentration of carbon dioxide.
Story ends.
Also on the approximately half page spread was a map of Oz with the fields laid out under the title "It's a gas"
So there ya go. Should stir things a bit. I thought after the spread that MEO would have pushed up a fair bit today but there is always tomorrow.
Good luck to holders.
MEO Price at posting:
21.5¢ Sentiment: LT Buy Disclosure: Held
