Delays to the Browse and Scarborough gas projects could open opportunities for smaller operators and has sparked a flurry of movement as businesses seek to secure gas contracts, says Strike Energy Managing Director Stuart Nicholls.
In a presentation to the Petroleum Club, Mr Nicholls said Strike was fielding queries from potential customers.
“We are seeing raw materials, petrochemicals, LNG, wholesale gas, electricity, refiners coming to Strike looking for gas in that mid-2020s period,” Mr Nicholls said.
“I think that the market has quickly turned on a dime from thinking we're going to see Browse and Scarborough proliferate gas into West Australian market and I'm going to have my pick of the litter of cheap and affordable gas, to the major industrial customers of Western Australia now saying I need to secure gas for the mid part of the decade because a lot of these major projects have been delayed.”
He said new projects would need to be brought online for demand to be met, which he said “could be anywhere between 298 and 436 terajoules a day short by 2029”.
Without the Browse and Scarborough projects, the Woodside-managed North West Shelf would be looking for gas from third parties.
“I hope this creates a massive exploration boom in the Perth Basin because that's the gas that's going to be able to be brought online the quickest and pushed up that pipeline, or offset gas coming south from that pipeline in order to be able to fill those trains and take advantage of this unique opportunity that we have right now,” Mr Nicholls said.
“One thing to remember is that every gigajoule of gas that comes out of one of those projects that make its way to the North West Shelf is one gigajoule less going into its traditional market of the domestic gas market in Western Australia, which is going to continue to force the domestic market to compete with that demand sink of the Northwest Shelf.
“It is a really interesting change in our dynamic and not one that I think people thought would happen as soon as it has.”
He said it was a “great time for Strike”. “We are sitting on a very large resource of highly producible conventional gas, very low levels of impurities, with a low-cost base.”
Strike has said it will partner with Australian Gas Infrastructure Group to build, own and operate the plant to process its West Erregulla gas.