Mondarra Gas Storage Facility - developing a more flexible gas market
Michael Puls
Business Development Manager, APA Group
WA Power & Gas Conference 11 March 2014
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Agenda
About APA
Mondarra Gas Storage Facility
How it works
Services offered
How it’s being used
Flexible gas contracting
Summary/ Questions
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About APA
Australia’s largest natural gas pipeline owners
APA natural gas pipelines (including investments)
Other natural gas pipelines
Gas resource Gas production
Perth
Darwin
Melbourne
Sydney
Brisbane
Adelaide
Gladstone
Mount Isa
Moomba
APA owned and operated assets
Transmission pipelines 14,100 km
Gas storage Mondarra Gas Storage
Dandenong LNG
Distribution networks 25,000 km mains
1.25m gas users
Power generation 6 power plants
430 MW
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Mondarra Gas Storage Facility
1972-94 Mondarra produced 25PJ gas
1994 – reservoir converted into a gas storage facility
2013 - expanded to 15PJ useable gas storage capacity
Strategically located
– intersection of WA’s two major pipelines
First commercial storage facility in WA
– 1 of only 2 nationally
Mitigates short term security of supply risk
Increases flexibility, creating options to manage gas production and consumption
Source: APA & AER State of the Energy Market 2011
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Mondarra – how it works “INJECTION”
Gas is injected into the reservoir through wells M8, M6 & M1
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Mondarra – how it works “WITHDRAWAL”
Gas can be withdrawn from both PGP and/or DBNGP through wells M8, M6 & M1
To PGP
To DBNGP
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Mondarra services
Storage services:
– Flexible approach: services tailored to suit customer requirements
Transport services
– Access to swaps & other secondary market transport options
Gas Loan Service
– Provides access to up to 100TJ of gas per customer in an emergency
Injection Firm As Available
Storage Firm As Available
Withdrawal Firm As Available
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Mondarra – how’s it being used
1. Security of supply
– Gas available close to major centres of demand
– Multiple transport options
2. Seasonal & short term services
– Manage peak demand
– Take advantage of short term and spot market trading opportunities
3. Support management of upstream & downstream assets
– Manage commissioning, ramp up & maintenance periods
4. Flexible contracting
– Limit take-or-pay obligations through optimum (risk-weighted) level of firm supply and/or spot purchases and/or gas loan
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Flexible Contracting Matching supply and demand: Gas Sellers generally want to sell 100% take-or-pay contracts, so
how do you contract?
In this example you need to be able to manage demand between 0 to 13 TJ/day… what’s the appropriate level to contract at?
Traditional
Flexible
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Flexible Contracting – 1 month view
DCQ
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Flexible Contracting – reducing cost
Traditional gas supply arrangements…
– Costs: Gas contract at MDQ: 6TJ/d @ $7.50 $16.4m
Gas transport contract at MDQ @ $1.55 $ 3.4m
Total $19.8m
– Risks: Take or pay obligation vs demand Pay for flexibility Supply interruption
Flexible contracting using storage…
– Costs: Gas contract at DCQ 4 TJ/d @ $7.50 $11.0m
Gas transport contract at DCQ @ $1.55 $2.3m
Gas Storage contract at 2TJ/d Inj/Withd $0.8m
Spot gas (2TJ/d x 180 days x $5) $1.8m
Spot gas transport in/out (2TJ/d x 180 days x DBP/PGP) $0.6m
Total $16.5m
– Risks: Largely mitigated with reduced costs
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Summary
Mondarra can deliver:
Security of supply
Seasonal & short term services
Support to manage upstream & downstream assets
Flexible contracting: reducing gas supply chain costs, managing risk & creating flexibility
¿Questions?
For further information contact Michael Puls
Transmission, APA Group Tel: +61 8 6189 4346 E-mail: [email protected]
or visit APA’s website
www.apa.com.au