Managing Swing in the East Coast Gas Market. Anthony Fowler CEO Lochard Energy

Transcription

1 Managing Swing in the East Coast Gas Market Anthony Fowler CEO Lochard Energy

2 Introduction to Lochard Energy

3 Lochard Energy Lochard Energy is a new midstream energy infrastructure business Current assets consist of the natural gas processing and storage facility at Iona in Victoria Purchased by a QIC lead Consortium from EnergyAustralia in December 2015 Lochard Energy will be run as a standalone business with an experienced Board and management team Head office in Southbank, Melbourne

4 Lochard Energy cont. Lochard is an important piece of gas infrastructure providing swing into the southern gas markets. Asset Overview Lochard provides gas storage, processing and compression services to the eastern Australia gas markets Locational advantages through access to Victorian and South Australian gas markets; as well as proximity to Otway gas fields Responsible for meeting approximately 30% of peak Victorian winter gas demand Facility comprises three separate underground sandstone storage reservoirs The geological properties of the reservoirs (measured by permeability and porosity of the sandstone) are some of the best in the world for storage Superior withdrawal and injection rates relative to other Eastern Australian gas storage facilities Competitive expansion opportunities available onsite Eastern Australian Gas Markets, Storage and Transmission Network Moomba UGS 70 PJ Santos Lochard Energy Iona 23.5 PJ Iona UGS 23.5 PJ EA Ballera UGS 10 PJ Santos Dandenong LNGS 0.7 PJ APA Carpentaria Pipeline South West Queensland Pipeline Roma UGS >50 PJ Santos Silver Springs UGS 35 PJ AGL Newstead UGS 2 PJ Origin Newcastle LNGS 1.5 PJ AGL Cooper Basin (1,802 PJ) Surat & Bowen Basins (41,287 PJ) NSW Basins (2,283 PJ) (1) Gippsland Basin (3,568 PJ) Bass Basin (250 PJ) Otway Basin (750 PJ) Transmission Pipelines Underground Storage LNG Storage Major City

5 Managing Swing in the East Coast Gas Market

6 MDQ (TJ/Day) Seasonal Demand for Gas Daily MDQ vs EDD/HDD (May-Sep 15) 1,400 1,200 1, VIC NSW SA VIC NSW SA Winter demand variability driven primarily by heating Impact of population growth expected to be moderated by energy efficiency and fuel switching in the residential and commercial sector Summer demand variability from gas fired generation Gas consumption from generation expected to decrease in medium term due to rising gas prices in over-supplied generation market Long term gas consumption from generation has potential to recover strongly due to retirement of coal plant and to manage intermittency from renewables EDD (VIC)/HDD (NSW &SA)

7 Peak Intermediate Sources of Peak Gas Supply Victorian Demand Duration Profile Type Commentary Peak Gas Producers GSA flex has historically been the primary source of swing services to the domestic markets Reservoir and other storage expected to become a more economic alternative to swing supply in the future Reservoir Storage Current limited diversity of operating reservoir storage facilities Variable reservoir quality - some existing assets have significant storage capability but low withdrawal rates Access and haulage costs to market are an important consideration Intermediate Reservoir Storage Lochard Energy Enjoys the benefits arising from its unique scale, location and geology Only independent storage facility with the ability to supply for a sustained period of at least 40 days with rapid withdrawal rate of 390TJ/day Able to supply to both the Victorian and South Australian markets directly Base Load LNG Storage Current facilities at Dandenong (Victoria) and Newcastle (NSW) Role limited to peak days due to limited storage and slow refill rates (depleted in ~10 days) Linepack Insignificant capacity relative to underground storage and production flex Role limited to meeting needle peaks Source: ACIL Allen

8 Source: AEMO Sources of Peak Gas Supply cont.

9 Source: AEMO Future Drivers of Peak Gas Supply: Impact of LNG

10 Future Drivers of Peak Gas Supply: Availability of Producer Swing Source: AEMO

11 Future Drivers of Peak Gas Supply: Resurgence in Gas Fired Generation 250, ,000 Generation Mix (medium scenario) 210, , , , , ,000 90,000 70,000 50, Biomass Black Coal Brown Coal Cogen Distillate Hydro Solar Wind CCGT OCGT Source: AEMO