CEO's report

Chief Executive Officer’s report

What a challenging year 2021 has turned out to be. I can distinctly remember looking forward to it as I reflected on 2020 in the last days of the working year before Christmas! Fast forward eight months and I am writing this from lockdown and busy organising APGA’s Virtual Convention for the second year running.

Making the decision to go virtual this year was not a great experience, but unfortunately it is increasing clear it was the right one. The support and understanding from exhibitors, sponsors, delegates and members has been fantastic and the Board and secretariat genuinely appreciate everyone’s response.

I’d especially like to thank the sponsors that are staying with us for the Virtual Convention. Their support will make a real difference to the bottom line of the association this year and that is something that will benefit all members as we are able to continue providing services throughout the year. You’ll find them all listed on page 19.

In addition to the great support the association has received in moving to the Virtual Convention, a further silver-lining is the uncertainty it has removed from our processes. Pretty much everyone at the secretariat is involved in events in one way or another and this year the team has had all the work of every event combined with the need to cancel, reschedule and renegotiate contracts for many that we’ve had to change. The team has done well in difficult circumstances and now everyone is freed up to focus on delivering the best virtual event we can.

This edition also marks the final message from Tony O’Sullivan, APGA President. Every President experiences a different presidency, and I would be willing to bet there would be very few takers looking to swap their experience with Tony’s!

Tony’s term coincided with having to postpone both annual conventions, having the Audit and Risk Committee meet monthly during 2020 to maintain oversight of the budget and with having to replace our long-standing Business Manager. To top it all off, he hasn’t had the opportunity to deliver the President’s address at the opening session of the Convention.

The world has changed a lot in the past two years, and we have reviewed the risk register a couple of times in this period. Tony has brought his significant experience to that process, leaving this important governance tool of the association in very good shape. Tony has also been a great Chair of Board meetings.

You all know the characters in this group and Tony has kept us on time and on track every meeting while ensuring everyone has the opportunity to speak. Tony, thank you for everything you have done for the association in the past two years. Much work of the Board and President is not always highly visible but I am very grateful for the time and energy you have put in.

In 2021, we have seen a big step up in the climate and energy discussion. There is plenty of debate still, but I would say it is now far more focused on the best way to reach net-zero, rather than the timing or necessity of the goal itself.

In the past few months, APGA has devoted time and effort into responding to the Victorian Gas Substitution Roadmap process. I found it interesting how much work the gas industry needed to put into the submissions made. Despite the wealth of great information available on the transition to renewable gas and the benefits of gaseous energy, until this government process focused our attention, it had not really been pulled together in a comprehensive way. Now the work is done and we are working with other parts of the gas sector to turn the information in our submissions into a new, comprehensive report setting out the detailed case for natural gas today and renewable gas tomorrow. The National Policy Manager’s article covers some key points made in this process.

Finally, I’d like to draw everyone’s attention to the Australian Energy Market Operator’s 2021 Inputs. Assumptions and Scenarios Report. This innocuously titled report is an influential step on the way to AEMO’s 2022 Integrated Systems Plan, a key planning document for the energy industry.

AEMO considered four future scenarios as inputs this year and the ‘Hydrogen Superpower’ scenario, whereby Australia develops a major hydrogen industry by 2040, is the scenario that gets us to net-zero most quickly and with the highest level of economic growth. It is a timely, independent analysis of the potential of hydrogen and other renewable gases and a good sign the gas industry has a promising future in the decades ahead.

We’ll be talking more about this at the Virtual Convention, I hope we see you there!

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APGA Secretariat Registered Office:

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Chief Executive Officer

Steve Davies

Corporate Services Manager

Peter Heffernan

National Policy Manager

Jordan McCollum

Communications Manager

Karen Polglaze

Engagement Manager

Dean Bennett

Membership Officer

Katy Spence

Acting Administration and Events Officer

Belinda Haddon

STEVE DAVIES

CHIEF EXECUTIVE OFFICER

Momentum Energy Managing Director resigns

Amy Childs leaves Momentum Energy after more than five years with the company and a replacement yet to be appointed. Ms Childs was appointed Momentum Energy’s Managing Director in November 2018, making her appointment more than two years before her resignation on 1 August 2021. Momentum is Hydro Tasmania’s mainland retailer. Hydro Tasmania CEO Evangelista Albertini says he was disappointed to lose a leader of Ms Childs’ calibre, stating the company had seen a 37 per cent increase in customer growth since her appointment. The company’s current General Manager of Sales and Marketing, Naomi Morton, will lead the business while Hydro Tasmania begins the process of recruiting a replacement.

Santos and Oil Search agree to merger

Santos and Oil Search will sign a $21 billion merger agreement in a move that will combine two of Australia’s largest oil and gas companies. On 2 August 2021, the companies reached an agreement for the proposed merger, with the latest offer representing a modified agreement following Santos’ initial rebuffed offer in July. Oil Search says the earlier offer undervalued the company and its assets in Papua New Guinea. Under the revised merger proposal, Oil Search shareholders will own 38.5 per cent of the merged group and Santos shareholders will own 61.5 per cent. The board of Oil Search intends to unanimously recommend the revised merger proposal. Santos Managing Director and Chief Executive Officer Kevin Gallagher says the potential merger would create an “unrivalled regional champion of size and scale” with a unique diversified portfolio of oil and gas assets.

Senex and Adbri sign gas agreement

Senex Energy and Adbri Limited have signed a new seven-year gas sales agreement to support manufacturing operations. On 22 July 2021, Senex announced the long-term agreement with Adbri to supply up to 11 PJ of natural gas to support Adbri’s South Australian manufacturing operations until 2030. Under the terms of the deal, Senex will supply Adbri with natural gas from January 2023 at the Moomba Gas Hub at fixed price, in line with current market levels. Senex Managing Director and CEO Ian Davies says the company was proud to supply the leading cement manufacturer in Australia, stating the partnership would broaden its reach throughout the east coast of Australia. Adbri CEO Nick Miller says the company was pleased with the gas supply agreement and it aligned with its low-cost and low-carbon fuel portfolio.

Metgasco appoints new Managing Director

Metgasco has appointed Chief Executive Officer Ken Aitken as the company’s new Managing Director. Mr Aitken accepted the board’s invitation to take up a role as director of the company, although there will be no changes to his remuneration or employment arrangements in relation to this appointment. Mr Aitken has been CEO of Metgasco since November 2018. The company says his well operations management expertise has proven indispensable in the company’s Cooper Basin portfolio and in securing the highimpact Cervantes L14 prospect in the Perth Basin. Metgasco says the move showed its commitment to the growth of its exploration and development portfolio in a dynamic period in the energy sector. The company expects to transition into a material gas producer in 2022.

Peter Coleman joins Schlumberger

Former Woodside Managing Director and CEO Peter Coleman has been appointed to the Schlumberger Board of Directors. Mr Coleman retired from his position at Woodside in June this year after 10 years in the top job. Prior to joining the company, he spent 27 years with ExxonMobil in a variety of roles including Vice President Development Asia Pacific and Vice President Production Americas. At Schlumberger, Mr Coleman will also serve on the board’s Nominating and Governance Committee and Finance Committee. Schlumberger provides energy products, sales and services in more than 120 countries across the entire value chain, from exploration through to production and sustainability.

Altrad to acquire Valmec

Global services and equipment provider Altrad has entered into a binding Scheme Implementation Deed for the acquisition of Valmec. Altrad intends to acquire approximately 98 per cent of the issued shares in Valmec by way of a Scheme of Arrangement, which if implemented would see Valmec receive a total cash consideration of $0.413 per share. This offer implies an equity value for Valmec of approximately $52 million. The scheme is expected to be voted on at a Valmec shareholders meeting in October 2021, with the Valmec board having unanimously recommended in favour of the acquisition. If successful, Valmec Managing Director Steve Dropulich would retain a shareholding in Valmec of approximately 2 per cent and will continue as Managing Director. Mr Dropulich controls another 5.3 million shares, or approximately 4 per cent, in Valmec which would be subject to the scheme. .

Dorado FEED contract awarded

Santos has awarded the FPSO FEED contract to Altera Infrastructure. Dorado is an integrated oil and gas project in the Bedout sub-basin, offshore Western Australia, and will be developed in two phases. Santos has an 80 per cent operated interest in Dorado, with the remaining interest held by Carnarvon Petroleum. Back in June, the Dorado project entered the front-end engineering design (FEED) phase, which included the awarding of contracts for the floating production, storage and offloading (FPSO) and wellhead platform. Santos has since announced that Altera Infrastructure has been awarded the FEED contract for the FPSO facility for the Dorado project. The FPSO contract is the project’s largest, entailing engineering, procurement, construction, installation, commissioning and testing of the facility. Santos Managing Director and Chief Executive Officer Kevin Gallagher says he was looking forward to working with Altera on the developments. “This contract is an important milestone for the project and Altera brings extensive FPSO design and operations expertise to the development. The FPSO design will provide for the integrated development of both the liquids and the gas resource and retains sufficient flexibility to support future nearby exploration success,” he says. A contract for the design, supply and installation of the wellhead platform has yet to be awarded, but is expected to be announced soon. Altera Infrastructure President of Production Chris Brett thanked Santos for its confidence in the company and said he was eager to apply the company’s 30-plus-years of experience to the Dorado development. Mr Brett added he was also enthusiastic about bringing forward the latest emission reducing solutions in line with the company’s vision to lead the industry to a sustainable future. Dorado is a low CO2 reservoir with approximately 1.5 per cent CO2 and reinjection of gas in the initial phase, making it one of the lowest emission intensity oil projects in the region.

Woodside, MAN LNG form partnership

MAN Energy Solutions and Woodside have signed a cooperation agreement to commercialise a solution for a small-to-mid-scale LNG production. The solution, ‘Factory LNG’, combines Woodside’s intellectual property and LNG experience with MAN’s global manufacturing expertise. The partners believe the newly developed infrastructure has the potential to unlock liquefaction capabilities around the globe. The system is designed and manufactured to be scalable so customers can increase the number of Factory LNG units used as the market grows. The concept involves MAN’s high-speed, oil-free, integrated motor-compressor technology as used in subsea compression-station applications.

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