Technology and collaboration heating up the gas industry
How will new technology impact WA’s oil and gas industry and how will we position ourselves for an offensive and defensive prospective?
That was one of the main issues discussed by PCWA’s panel of speakers Bernadette Cullinane, Deloitte National Oil and Gas Leader, Mary Hackett, LNG Marine Fuel Institute director and Francis Norman, NERA general manager innovation and strategy at PCWA’s latest meeting.
With the industry set to transform and transition to a decarbonised economy where LNG and electricity will play increasing roles, the panel explored the opportunities and challenges expected to influence WA’s oil and gas industry in 2019.
“There’s been structural change – we now have a gas and renewables focus going forward, and this creates major opportunities for WA companies,” Cullinane said.
“Companies are now thinking, where will I get my new sources of revenue and how will I manage a more diverse portfolio than I perhaps imagined just 10 years ago.”
PCWA’s panel of speakers from L-R; Francis Norman, NERA general manager innovation and strategy, Bernadette Cullinane, Deloitte National Oil and Gas Leader, and Mary Hackett, LNG Marine Fuel Institute Director with Paul Stone
REVIEW OF 2018
2018 was, no doubt, a momentous year for the oil and gas industry, with Australia taking the crown as the LNG world leader, largely due to Shell’s floating LNG Prelude project which hit first gas, and Inpex’s 40 billion-dollar LNG Ichthys project which came into full operation.
In 2017-2018 Australia’s oil and gas export dividend represented nearly $30 billion.
“On the back of that, we now have 88 million tonnes of LNG in production capacity built out in Australia. We have 21 LNG trains in operation, and we also have several trains now making their way in terms of turnaround and shutdown cycles,” Cullinane said.
With gas almost certain to be the transition fuel from today’s coal focussed economy, we are seeing companies like Chevron, Exxon and Total, who have traditionally been oil focused, also turning their attention to gas.
And even with the enormous success of LNG, Hackett said the gas industry needn’t be overlooked.
“WA delivers and consumes gas at almost an equal rate as the eastern states put together. So, while we are a mammoth LNG player, we are equally mammoth in the gas world and the use of gas for our industries locally, and that’s an important aspect,” Hackett said.
IMPACT OF NEW TECHNOLOGY
With LNG likely to springboard to hydrogen as a significant fuel of the future WA could take gas to the next stage of manufacture.
“Ultimately hydrogen, we believe, will be created from electrolysis. That’s our ultimate renewable outcome, but we’ve got to get there,” Hackett said.
“Hydrogen is generally manufactured from methane and natural gas through a steam methane reforming processing which releases carbon dioxide. Blue hydrogen talks about carbon capture and storage linked to that process. So that’s something we could definitely do.”
With a heavy transport industry in WA, Hackett said it’s possible in the future all our trucks could be hydrogen trucks.
“Ammonia gets produced from this process as well. Some of our marine engine builders are telling us within three years there will be hydrogen engines fuelled off ammonia. What if we started to build that as a fuel and take the lead for the world?”
“But in order to see these technologies evolve in our own backyard the WA oil and gas industry needs to encourage the government to put real investment in” suggested Hackett.
COLLABORATION WITHIN AND ACROSS INDUSTRIES
All three panellists agreed the industry needed more collaboration in order to achieve better outcomes.
“Bringing together like-minded people to work on a common challenge in a competitive, collaborative environment, where everyone brings their own IP, is such an important opportunity for us here,” Norman told the audience.
“Up in Queensland at Curtis Island, we have QCLNG and Australia Pacific LNG (two gas export projects) starting to sell gas to each other. They are working together, sharing infrastructure for gas processing and water processing, which really is a world first,” Cullinane said.
Hackett pointed to WA’s lithium industry and Lithium Valley as a good model for industry collaboration.
Although WA does not have a history of adding value to its raw materials before export, Lithium Valley may set a new precedent for the WA mining and oil and gas industries if successful in establishing their case for energy metals and battery manufacturing here in WA.
“They’re creating a space where they are saying no, we are not going to allow this wasted opportunity, we are not going to export the raw material, we are going to create value here in WA from this material. We can look at their model and consider what this community looks like,” Hackett said.
“With Lithium Valley, WA can be the future of energy storage and the new energy precinct of the world. I think that’s poignant moment in the industry’s history - happening right now, as we seek to look for the next hope beyond LNG.”
Collaboration in the oil and gas industry could also be taken to the next level by encouraging collaboration across industries.
However, in order to achieve this there will need to be a conscious intention from WA’s oil and gas industry.
With many opportunities for the use of LNG and CNG in the mining industry it would be a very different world if all of WA’s mining plant and equipment was powered by gas.
“We wouldn’t have the heavy imported diesel cost that we have, so if we can augment the collaboration across industries, I think that will be terrific,” Hackett said.
“We have got to look at broader uses. We need to go beyond simply exporting our raw materials. By creating the technology hub in WA will building a new, richer, more fertile thriving economy.”