APA Group · ASX:APA
APA — Australian Pipeline Trust — Interconnect 2001 Conference
31 slides from APA's conference presentation, Sep 21, 2001
Slide 1: Eastern Australian Gas Markets: A Point in History
Eastern Australian Gas Markets A Point in History J. K. McDonald Interconnect 2001 Conference 21 September 2001 Australian Pipeline Trust
Slide 2: Natural Gas National Market
Natural Gas National Market !2015: natural gas = 28% primary energy !Competitive reform still “work in progress” !Supply shortfall for S.E Australian markets !Disincentives must be removed !National gas policy essential Australian Pipeline Trust 2
Slide 3: Natural Gas Supply Chain
Natural Gas Supply Chain Producers Transmission/ Distribution/Network Pipeline Wholesale contracts Wholesale Wholesale contracts Industrial and power contracts generation customers Retailers Retail The gas supply chain tariffs The gas marketing chain Residential and commercial customers Australian P
Slide 4: Pipeline Trust
WESTERN AUSTRALIA ta Leinster Murrin Murrin Kalgoorlie Mereenie’ Amaveus |! Walley Basin Alice Springs Gas Pipelines Other APT Pipelines GIPPSLAND Basin
Slide 5: Energy Growth - 2015
Energy Growth - 2015 7000 6000 N on G as G as 5000 4000 3000 2000 1000 0 PJ Year 85 90 95 00 05 10 15 19 19 19 20 20 20 20 Source: AGA / NIEIR Australian Pipeline Trust 5
Slide 6: Challenges for Domestic Gas
Challenges for Domestic Gas !Supply shortfall in S.E. Australia !Substantial investment necessary !Large industrials locate at gas source !Innovative gas applications needed Australian Pipeline Trust 6
Slide 7: Challenges for Domestic Gas
Challenges for Domestic Gas !Gas fired power a must !Gas is clean but coal is cheap !Gas price an issue Australian Pipeline Trust 7
Slide 8: Plant Capacity vs Load Factor
Plant Capacity vs Load Factor ACTUAL REQUIRED GAS E PLANT D CAP C ANN B LOAD AVG PLANT A Australian Pipeline Trust 8
Slide 9: Issues for Pipelines
Issues for Pipelines !Focus must shift to: - Efficient use of capital - Encouragement of system expansion - Encouragement of new pipelines - Research to lower capital cost - Reliability and integrity of system Australian Pipeline Trust 9
Slide 10: Queensland
Queensland !Most important growth market !Direct use industrial processes !Commitment to gas fired power !Value add minerals process plans Australian Pipeline Trust 10
Slide 11: Queensland
Queensland !Strong industrial / population growth !Needs additional gas supplies - 2004 !Needs northern gas by mid decade Australian Pipeline Trust 11
Slide 12: Victoria
Victoria !Largest average residential loads !Largest commercial consumption !New gas Otway, Yolla, Patricia Baleen !Gas fired power: - back on stream Jeeralang, Newport - planned Bairnsdale, Somerton, Maryvale Australian Pipeline Trust 12
Slide 13: Victoria
Victoria !Self sufficient in gas supply !No immediate need for northern gas Australian Pipeline Trust 13
Slide 14: New South Wales / ACT
New South Wales / ACT !Some opportunity for gas fired power: - Sithe Smithfield on stream - ACT planning gas power - Duke planning mixed fuel at Wollongong !Energy policy is black coal based !By 2015 gas < 20% total energy Australian Pipeline Trust 14
Slide 15: New South Wales / ACT
New South Wales / ACT !Supply contracts expire - 2006 !Connected to all gas supplies !Needs northern gas by mid decade Australian Pipeline Trust 15
Slide 16: South Australia
South Australia !Uses gas for > 40% of power !Needs more power !New pipeline from Otway !Needs northern gas by mid decade Australian Pipeline Trust 16
Slide 17: Tasmania
Tasmania !Pipeline completed mid 2002 !Will generate some power with gas !Will be supplied from Victoria !No immediate need for northern gas Australian Pipeline Trust 17
Slide 18: CO2 Emission by Electricity Production
CO2 Emission by Electricity Production 1300 gms / kW brown coal/steam coal/steam oil/diesel gas/steam gas/comb.cycle gas engine/cogen 250 gms / kW Australian 0 200 400 600 800Pipeline 1000Trust1200 1400 Source: Powerline GES specific CO2 emissions (g/kWh) 18
Slide 19: Power Generation Dilemma
Power Generation Dilemma !Gas cannot match coal fuel price !Fuel switching requires encouragement !If no power generation, no northern gas? Australian Pipeline Trust 19
Slide 20: Power Generation Dilemma
Power Generation Dilemma !If no northern gas, rising wellhead prices? !Rising wellhead prices, coal wins? !Window of opportunity is open Australian Pipeline Trust 20
Slide 21: LNG Export Dilemma
LNG Export Dilemma !Australia - world class supplier of LNG !Vast reserves and economies of scale !LNG export revenue > $AUS2B p.a !World LNG trade increase 6.7% p.a. Australian Pipeline Trust 21
Slide 22: LNG Export Dilemma
LNG Export Dilemma !PNG gas and some Timor gas imported !Pressure to export all northern gas? !Should we reserve gas for domestic use? Australian Pipeline Trust 22
Slide 23: Regulation and Gas Policy
Regulation and Gas Policy !Present regime unsatisfactory !Future projects seriously at risk !Investors nervous !Role of the Regulator !Planned review welcome and timely Australian Pipeline Trust 23
Slide 24: Balanced Intervention
Balanced Intervention ! ACCC: Regulator and community advocate - conflict of interest ! Industry concerns validated: EPIC injunction, EGP coverage decision ! Theory vs. reality: rate of return models Australian Pipeline Trust 24
Slide 25: Balanced Intervention
Balanced Intervention ! Government makes policy and the Regulator monitors compliance Australian Pipeline Trust 25
Slide 26: Energy Regulation Review
Energy Regulation Review !Productivity Commission PartIIIA review !Review of Application of Gas Code !CoAG initiative: Council on Energy - Independent review of energy directions - Development of national energy strategy !Fiscal regime for long term projects Australian Pipeline Trust 26
Slide 27: A Constructive Regulatory Environment
A Constructive Regulatory Environment: !Distribution vs transmission; Mature systems vs greenfields projects !Encouragement to expand infrastructure !Removal of structures inhibiting market Australian Pipeline Trust 27
Slide 28: A Constructive Regulatory Environment
A Constructive Regulatory Environment: !Streamlined approval processes !Appropriate fiscal regimes !Cleaner energy programs Australian Pipeline Trust 28
Slide 29: A Point in History…
A Point in History… !National grid can be realised !Markets can be linked !New supplies can be available !New gas applications possible Australian Pipeline Trust 29
Slide 30: A Point in History…
A Point in History… !Foundation vs short term/spot contracts !Market “hubs”appearing COMPETITION CAN BE ENHANCED !Governments are listening BUT………… Australian Pipeline Trust 30
Slide 31: www.pipelinetrust.com.au
www.pipelinetrust.com.au Australian Pipeline Trust
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