Beach Energy makes second gas discovery in Otway Basin
Beach Energy has landed a second gas discovery offshore Victoria’s Otway Basin as it seeks to boost supplies to southern states.
Beach Energy has landed a second gas discovery offshore Victoria’s Otway Basin as it seeks to boost supplies to southern states ahead of a looming shortfall in the next few years.
The South Australian producer is looking to tap discoveries from its Otway Basin drilling program to help feed its 205-terajoule-a-day Otway Gas Plant near Port Campbell in southwest Victoria.
Its Artisan gas discovery, 30km off the coats of Victoria, followed success at its nearby Enterprise well in February, with plans now under way for the rig to drill two wells at the Geographe field before moving to the Thylacine field for four more wells. First gas from the new Geographe wells is expected in 2022.
“Beginning our Otway campaign with two exploration successes is a good result,” Beach chief executive Matt Kay said.
Still, the Artisan discovery was at the lower end of pre-drill expectations with the gas-water contact “a bit higher than forecast, implying this discovery has not delivered the full reserves upside expected by Beach”, RBC analyst Gordon Ramsay noted.
Beach is among oil and gas producers working to fill a projected gap for the east coast with the Australian Energy Market Operator poised to update the market on its latest forecasts in its forthcoming gas statement of opportunities due before the end of March.
The east coast gas shortfall predicted for 2024 by AEMO has eased, but the market will experience seasonal gas shortages through this decade, according to consultancy WoodMackenzie.
Forecasts from gas producers show several gas fields could end production from mid-2023 to mid-2024, prompting the Morrison government to consider a raft of new measures including a national gas reservation scheme to ensure enough supplies are in place for local users.
Offshore production from the Bass Strait is set to decline from 2023 while output from the Cooper Basin will fall away from 2026, raising concerns for users in Victoria, NSW, South Australia and Tasmania.
If they shutter supply sooner, southern states could face supply gaps in peak daylight hours as early as 2023 during winter, when average consumer demand is three times more than in summer.
“Overall, we think Beach is doing a great job towards fulfilling its strategy to refill the 205 TJ/d capacity Otway Gas Plant by the 2023 financial year to be in a strong position to supply additional gas volumes into an emerging structural deficit in the east coast Australian gas market,” Mr Ramsay said.
Beach shares rose 1.45 per cent to $1.74.
