Gas inflates energy income -

AUSTRALIAN energy producers are cashing in on the boom in petroleum products, with prices and volumes increasing strongly over 2005.

Oil and gas production rose 6.4 per cent to 446 million barrels of oil equivalent over the year, while stronger prices pushed the dollar return to producers up 30 per cent to a record $21.9 billion, according to estimates from the inaugural industry survey by Adelaide energy advisory group EnergyQuest.

The energy business is becoming increasingly export focused. Liquefied natural gas production rose 25 per cent to 11.61 million tonnes with Woodside's expansion of its North-West Shelf project. To put the LNG market in perspective, the growth in LNG production last year amounted to more gas than was consumed in NSW. Total LNG exports overtook local gas consumption in the four eastern states for the first time, the report said.

Gas demand in the domestic market, which has been growing, was supplied by coal-seam methane (CSM), production of which rose 85 per cent to 53 petajoules. CSM has grown quickly in recent years from a few pioneering wells and now accounts for 10 per cent of the gas consumed in the eastern states.

In Victoria, natural gas production has grown to 294pj as the state's oil production has fallen 20 per cent as the Bass Strait fields move into their dotage. As a result, overall oil and gas production is flat when measured in oil equivalents.

The contribution to the figures made by the newly developed Bayu Undan field north of Darwin was understated because 90 per cent of its output is attributed to East Timor under a royalty-sharing agreement.

Significant new gas production is expected in coming years as fields off the north-west coast such as Gorgon and Pluto come on stream as well as smaller fields off southern Victoria.