Oil and Gas News

EnergyQuest anticipates economic interference amid COVID-19

EnergyQuest has predicted in its April report that the next couple of years are likely to be characterised by economic disruption, uncertain energy demand and lower prices, with spending cuts for energy producers.

The report outlined that over the medium-term (to 2030) supply constraints would be increasingly evident with the decline of production offshore Victoria and absence of major new gas discoveries.

“Any developments onshore Victoria or NSW will provide some supply increments but are unlikely to materially shift the long-term demand-supply imbalance,” EnergyQuest stated.

However, the analysis also predicted that the development of the Arrow Energy Surat Basin acreage would provide some domestic gas but is most likely to feed QCLNG.

“We expect one and possibly two of the Gladstone LNG trains to be closed as increased gas volumes are diverted from the LNG projects to the domestic market. The gap between demand and supply will also increasingly rely on LNG imports at international prices,” the reported stated.

In addition, EnergyQuest reported that despite the current global conditions caused by COVID-19, LNG shipments were holding up well, with Australian projects supplying 6.9 million tonnes (Mt) in April.

“Overall COVID-19 restrictions do not appear to have affected domestic gas demand. Offshore Victorian gas production was down by 1.9 PJ in April compared with a year earlier but this appears to reflect lower gas demand for power generation rather than a fall in other demand,” EnergyQuest said.

During April, Australia delivered 40 cargoes to China, 36 to Japan and 10 to Korea.

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