Around twelve years ago, I found myself advising on what was then the largest liquefied natural gas (LNG) development project outside the gargantuan Qatari supply in the Persian Gulf.
This was the Chevron Corp. (NYSE:CVX)-led Gorgon project on the North West Shelf of Australia. The work was some 1,390 kilometers (860 miles) up the coast from Perth in an area that was sparsely populated, to put it mildly.
The beauty of Gorgon was two-fold: It pioneered a strikingly new underwater natural gas harvesting and delivery system, to supplement a series of large onshore fields also included in Gorgon), and it piped the gas to a series of LNG production trains located on Barrow Island off of the coast. That allowed easier access to tankers and less interference with onshore non-gas activities.
Some 75% of production was earmarked for export, with the bulk going to Asia. However, Gorgon is not the only gas/LNG project in the Australian northwest. In fact, LNG production has become a major element in the country’s aggregate energy picture, as highlighted by a number of large projects in the crescent from northwest to northeast Australia.
One of these other developments is Wheatstone, sharing a common area with Gorgon, also a Chevron project, and likewise extending the use of offshore locations for gas extraction and LNG processing.
Gas Put Onslow on the Map; The Microgrid Will Keep It There
The small town of Onslow, Western Australia, is home to fewer than 850 people, but has much of gas/LNG activity taking place about it. One of the problems emerging from Gorgon was the placement of a primary supply base. Given the realities of shipping and transport at the time, it had to be set up by the large port facilities in Perth, a 16-hour trucking journey over some of the least desirable roads available.
When Wheatstone and then, later, the Pluto and North West Shelf projects were developed close by, the main supply base was moved up to Onslow, following some major dredging and port work.
Source: EICOnslow may have continued as a small hamlet. But is also now at the apex of one of the most interesting interconnections among LNG production and local power needs.
The key turns out to be solar energy.
Last week it was announced that Horizon Power, Western Australia’s regional and remote energy utility. Horizon’s service area is around 2.3 million square kilometers (1.42 million square miles), but the region’s sparsely populated nature means it has just one customer for every 53.5 km2 (32.9 m2) of coverage. That means Horizon covers one of the biggest areas of any utility on the planet… with the fewest customers.
This unique utility is leading a renewable energy transformation with a demonstration project that enables the integration of much higher levels of renewable energy into an isolated microgrid at Onslow.
With a goal to provide more sustainable and cleaner electricity to its customers, and decrease generation costs, Horizon Power’s Onslow project integrates the solar farm and battery storage system with a gas-fired power station, coordinated by the PXiSE Energy Solutions Microgrid Controller.
For the Onslow project, the PXiSE Microgrid Controller uses high-speed data from connected energy assets, allowing for the optimization of renewable energy output and power quality. Lower operating costs are expected for the local area, as solar power displaces diesel generation.
Let that sink in for a moment: Despite being at the center of major natural gas production, Onslow remains too small for the expensive (and time-consuming) construction of a gas-fueled generating plant. Most of the local power continues to be produced by individual diesel-powered units.
Onslow customers have been provided incentives designed by Horizon, PXiSE, and the Pilbara regional government to install solar and battery at their homes as part of the project, which tests the management of renewable energy in an isolated regional community.
The main power bank is already completed outside of town.
Solar farm located next to Onslow. Source: PXiSE Energy SolutionsA source at Horizon (it so happens his father and I worked on the initial Gorgon project) tells me that the Onslow initiative has morphed into a significant part of the regional government’s renewable energy transformation, building both Western Australian capability and more renewable-friendly systems for regional communities.
This remains a local microgrid test project, with the power needs of the few Onslow residents remaining as the object.
But it doesn’t look like it is going to stay confined to Onslow.
Onslow Could Mean a Microgrid Breakout
Over the weekend, folks at PXiSE acknowledged that success in the Onslow test is already being discussed as the model for a broader network with prospects for better management of different energy sources in a more efficient array.
For their part, executives at Horizon are already talking about the customer-centric plan (with residents hooking up their own solar panels and batteries to a main microgrid) allowing for more extended applications.
That may ultimately bring in my former associates at Chevron. You see, LNG production is very energy dependent. You need to expend energy to produce energy. The calculus of bottom line profits is found in how much that exchange can be made cost effective.
If the Onslow experiment is successful, it can be scaled. And that may result in LNG from the North West Shelf of Australia experiencing a dramatic reduction in expenses resulting in a corresponding improvement in profitability.
Solar power, it would seem, may well by the main ingredient in Australian LNG expansion.
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