Australia rethinks gas strategy amid plant commissioning lag

While many headlines focus on production cuts, Australian independent Beach Energy is quietly laying the groundwork for long-term gas leadership. 

Despite adjusting its production target due to a delay at the Waitsia gas plant, the company is signaling strength with firm investment plans and forward-looking LNG strategies.

Production target tightens, not collapses

Beach revised its oil and gas production guidance for the financial year ending June 2025 to between 18.5 and 20.5 million barrels of oil equivalent (boe)—a tightening of its previous 17.5–21.5 million boe range, according Argus. 

The reason? A delay in commissioning the 250 TJ/d Waitsia gas plant in Western Australia, operated by partner Mitsui.

Still, there’s no panic. The company reaffirmed that first gas sales from Waitsia are expected between April and June, holding steady on operational confidence.

Strong first-half results reflect momentum

From July to December 2024, Beach achieved 10.2 million boe in output, marking a 15% increase from the same period in 2023.

This performance helped justify the upward revision of its forecast's lower end—proving that outside of Waitsia, other assets are delivering.

LNG swaps: strategic revenue streams

Waitsia has already brought value. Beach has completed five LNG swap cargoes, including two that brought in A$139 million (US$87.1 million) between July and December 2024.

A fifth cargo was lifted in January from the North West Shelf (NWS) terminal, and a sixth could follow by June.

Interestingly, about 35% of the swapped gas came from Beach’s Xyris facility, indicating smart use of available capacity—and less pressure for additional swaps this fiscal year.

Long-Term vision: LNG growth and offshore frontiers

What’s next? A consistent export rhythm. Beach anticipates shipping 8–10 LNG cargoes annually from Waitsia until 2028, supported by a gas processing agreement with the NWS JV and favorable regulatory changes in WA that open doors to expanded LNG exports.

Meanwhile, the company is gearing up for its Offshore Gas Victoria program.

A key part of this is the Hercules prospect in the Otway Basin, expected to be drilled between April and June.

The reserve? A potentially game-changing 100 billion cubic feet.

Investing through uncertainty

Even with production adjustments, Beach isn’t cutting back where it matters.

The company is holding firm on its A$700–800 million capital expenditure target for the year—proof of confidence in its portfolio and strategy.

By shifting focus from short-term obstacles to long-term positioning, Beach Energy is betting on gas—LNG in particular—as the cornerstone of its growth in Australia’s changing energy landscape.

Australia rethinks gas strategy amid plant commissioning lag