Additional crude production off Australia's west coast is coming from the NWSGP area. The region was originally considered to contain only natural gas until oil was discovered in the late 1980s. The Wanea-Cossack fields are estimated to contain more than 220 million barrels of recoverable oil. Full production from the fields, about 115,000 b/d, is expected by 1997. Oil in the region also has been discovered at the Lambert-1 and Lambert-2 fields. The discovery of Lambert-2 earlier this year has made production from the fields economically feasible given their close proximity to the already producing Wanea-Cossack fields. Production from the Lambert fields could begin as early as the first quarter of 1997. Continuing exploration and development will make offshore Western Australia the nation's largest oil producer, supplanting Victoria.

Refining and Petrochemicals

The largest petrochemical complex in Australia is located in Altona. The complex receives feedstocks for production from the Altona refinery as well as natural gas by pipeline from Victoria's Bass Strait offshore fields. The Botany complex near Sydney is being converted from naphtha feedstocks to natural gas, which will be piped from the inland Cooper Basin gas field. The most ambitious plans for the petrochemical industry are taking shape in Western Australia. Cheap and abundant natural gas from the NWSGP would be used as feedstocks for the proposed petrochemical complex. Western Australia's proximity to the emerging and expanding Asian markets would make the complex export-oriented. BHP is studying the possibility of building a methanol plant on Western Australia's Burrup Peninsula adjacent to onshore NWSGP facilities. Other proposed projects include plants to produce ethylene, propylene and methyl tertiary butyl ether (MTBE). Western Australia's Minister of Resources Development and Energy, Colin Barnett, is confident that "a major petrochemical complex will be commissioned or under construction by 2000."

Eight Japanese utilities have long-term contracts to purchase LNG from the NWSGP. The utilities are considering doubling the amount of LNG contracted after the year 2000. The NWSGP partners are expanding production and facilities to meet growing demand and the possibility of entering other markets in Asia. Natural gas produced in the North Rankin and Goodwyn fields is piped ashore to facilities in Karratha, Western Australia to be processed. Capacity expansion of the three LNG production trains was completed in 1995. Capacity increased from 6.9 million metric tons per year (mmt/y) to 7.5 mmt/y. The NWSGP members are planning to spend $ A 5 billion to install two additional LNG production trains, each with capacity of 3.4 mmt/y. Additional production will come from the recent discoveries in the Perseus field, which lies between the North Rankin and Goodwyn fields. Perseus is estimated to contain 5 trillion cubic feet (tcf) of natural gas.

Additional LNG supplies could come from the Gorgon gas field off the coast of Western Australia. The field, which has an estimated 7 tcf of natural gas, is being developed by a joint venture of Chevron, Texaco, Mobil, and Shell. Two development plans are being considered for Gorgon. One scheme is to link the field via pipeline to the NWSGP and utilize its LNG production facilities. The second plan is to create a new LNG project with the construction of a twin train LNG plant with capacity of 6 mmt/y. Other gas discoveries off Western Australia include the Scott Reef, Brecknock, and Scarsborough fields. The fields possess large amounts of gas, 9 to 18 tcf for the Scott Reef and Brecknock fields and between 2 to 12 tcf for the Scarsborough field, but they are not economically feasible to develop at this time.

The Timor Sea area is another possible site for a LNG project in Australia. The Undan-Bayu field has estimated reserves of 6 tcf. The field, which is in ZOCA, was originally explored by two consortia, one led by Phillips, the other by BHP. Additional exploration determined that the original discoveries came from a single field. Construction of a pipeline and a major LNG facility near Darwin, Northern Territory is being studied. A smaller offshore or floating LNG plant for the field is also being considered.

Development of coalbed methane (CBM) has just started in Australia. CBM nonconventional gas reserves in Queensland are 70 times larger than known conventional gas in the state, and are 3 times larger than the reserves in the NWSGP. The first commercial CBM project began operation this year. CBM from the Moura coal mine is piped by a 13 mile spur to Queensland's main gas pipeline. BHP and Mitsui are operators of the project. Other CBM projects include a 15 year contract between Tri-Star Petroleum and Queensland utility Allgas Energy to begin in January 1997, Conoco's plans for a 22 mile pipeline to deliver CBM to the port of Gladstone, and Enron's plan to develop CBM from reserves it holds in Queensland's Bowen Basin.

In February 1996, Broken Hill Proprietary (BHP) canceled its project to build a gas pipeline between Iran and Pakistan given the prospects of a United States bill becoming law that would place trade sanctions against companies helping to develop Iran's petroleum sector. The bill, The Iran Foreign Oil Sanctions Act became law on August 5, 1996.

Pipelines and Privatization

The northern section of the Goldfields Gas Pipeline began operation in mid 1996. The pipeline will eventually run 870 miles linking supplies from Yaraloola with mining operations at the Goldfields area near Kalgoorlie. The Southwest Queensland Pipeline is scheduled to begin operation in early 1997. Tenneco began construction of the 470-mile pipeline, which runs from the Cooper Basin to Wallumbilla, in late 1995. BHP and Canada's Westcoast Energy plan to build a 435-mile pipeline linking Longford, Victoria with Sydney and the industrial centers of Port Kembla and Wollongong in New South Wales. Operation is expected to begin in 1997. A possible interconnection of the gas grids of Victoria and New South Wales is being proposed. The 83-mile line would link Albury, Victoria with Wagga Wagga in New South Wales.

An international pipeline project is also being considered. The pipeline would stretch 1553 miles from Papua New Guinea's Kitubu and Pandora gas fields across the Gulf of Carpinteria to Queensland. The gas would be used by power plants, mining facilities, and other industrial users in northern Queensland.

The Queensland Electricity Commission was privatized and split into two divisions, Austa Electric for generation, and Queensland Transmission and Supply Corporation (QTSC) to handle transmission and distribution. The Gladstone power station was sold to the United States firms of Comalco and NRG. The firms also co-own the 180 MW Collinsville station that is to be recommissioned in 1998. The QTSC also plans to purchase electricity cogenerated from the states sugar mills. The Queensland Sugar Power Pool will initially supply 49 MW to the state grid, and increase its supply to 200 MW by 2001. Sithe Energies, of the United States, has proposed building a 300-500 MW natural gas cogeneration plant at Gibson Island.

Electricity reforms in New South Wales (NSW) have primarily involved the separation of generation and transmission companies. Pacific Power was originally responsible for generation and transmission in NSW, but in 1994 transmission was taken over by PacificGrid, a subsidiary. Establishment of a totally independent transmission company is planned, and the government of NSW is studying privatization similar to that of Victoria's. Sithe Energies plans to build a 160 MW natural gas cogeneration plant at Smithfield, and a larger 350 MW gas-fired cogeneration plant is under consideration near Sydney by a consortium of domestic firms.

The Commonwealth government's Industrial Commission has recommended that South Australia's state-owned electricity monopoly be split into separate entities, similar to reforms enacted in NSW and Victoria. A domestic firm , Boral Energy, along with CU Power, a subsidiary of Canada's ATCO, will build a 180 MW gas-fired cogeneration plant in Osborne. Construction is set to start in October, with completion scheduled in 1998.

The State Energy Commission of Western Australia has been broken into two independent utilities, Altingas and Western Power. The two entities may be privatized at a later date. Private power projects are also taking shape in Western Australia. BHP has built a 105 MW gas plant at Port Hedland , and is building an additional 105 MW gas-fired power plant at Newman Township to provide power for its mining operations. A joint venture of Normandy Power and TransAlta Energy is building a 75 MW power plant at Kalgoorlie. Gas for this plant will come from the Goldfields Gas Pipeline.

The Commonwealth government has also been trying to develop a national electricity grid. The National Grid Management Council was formed in 1991 with representatives from the states of Queensland, NSW, South Australia, Victoria, and the Australian Capital Territory (ACT). Currently there are grid connections between NSW and Victoria, Victoria and South Australia, and NSW and the ACT. The proposed Eastlink between Queensland and NSW was dropped due to surpluses of electricity in both states, and the expenditure required for the interconnection. The Basslink connection between Tasmania and Victoria is undergoing feasibility studies.

The massive Snowy Mountains Scheme (SMS) represents over 10 percent of Australia's generating capacity. The SMS was originally planned by the Commonwealth government as primarily an irrigation project with secondary hydroelectric operations. The seven power plants of the SMS have capacity of 3,740 MW. Electricity from the SMS goes to the ACT, NSW and Victoria.

Ranger, owned by Energy Resources of Australia (ERA), is increasing its production capacity to process 5,500 st of ore per year. Western Mining Corporation's Olympic Dam mine has production capacity of 1,650 st per year.

By the end of the century it is possible that two additional mines will have begun operation, ERA's Jabiluka, 12 miles north of the Ranger Mine, and Kintyre in Western Australia.

ECONOMIC OVERVIEW

ENERGY OVERVIEW

ENVIRONMENT OVERVIEW

OIL and GAS INDUSTRIES

COAL INDUSTRY