Queensland to become world’s third largest LNG exporter
Posted : Thursday, April 26, 2012
Gas is experiencing an unprecedented growth period and will
continue to play a significant role in meeting growing global
energy demand, Santos, Gladstone LNG Project,
President, Mark Macfarlane told a recent CEDA audience in
"The International Energy Agency predicts that gas will overtake
coal by 2030 to meet one quarter of the world's energy demand. By
2035 it will be within striking distance of oil," he said.
"Total world electricity demand is expected to increase by 70
per cent by 2035.
"It will be gas, more than any other source of fuel that will be
meeting this demand.
"Over the next 20 years we will see a near doubling of the
gas-fired electricity generation well ahead of growth in any of the
other fossil fuels or renewables."
Australia is currently the fifth largest LNG exporter, and will
be number one by 2020, with the state of Queensland expected to
become a global energy exporter, he said.
"By 2018 Queensland alone will rank as the third largest LNG
exporter in the world alongside Algeria and Malaysia."
"We expect an increase in Queensland's gross state product of
$427b from now until the period to 2035."
"Over that same period we expect the Queensland government to
receive $286b in revenue from the LNG revenue.
"By 2020 Australia's combined domestic and export demand is
expected to double to around 4 trillion cubic feet a year, (but) we
can't take our current strong position as an LNG supplier for
granted," he said.
"We are only one of the potential suppliers to Asia-Pacific
"Australia needs to maintain its international competitiveness
to ensure that these long term projects remain economic. We also
need to continue to attract investment.
"Unnecessary delays due to complex regulatory and approval
processes, increased costs through regulatory burden as well as non
market-based constraints will create opportunities for alternative
TRUenergy, Managing Director, Richard McIndoe
said the industry needs deregulation to ensure greater investor
confidence and to allow consumers to modify their behaviour of peak
Mr McIndoe said the industry's productivity issues can be partly
explained by investment into moving from base load to higher
peaking production. Peaking production is more expensive because it
is only turned on to manage peaks in energy demand for a short
period of time, he said.
"Retail electricity pricing and adapting electricity retail
pricing to meet these changing habits is one way of changing
behaviours and being more productive for the economy as a whole,"
Smart Meters introduced in Victoria he said were "an extremely
effective way of enabling people to understand their consumption
patterns and to move their consumption to lower priced
"Time of day pricing and time of day usage will allow consumers,
both domestic and commercial consumers, to adapt their behaviour by
spreading their usage over a broader period and reducing overall
peak demand, which will allow the industry to invest more
efficiently," he said.
"There is a significant resistance across the marketplace to
retail price deregulation, and this runs completely counter to the
way the industry needs to go.
"Retail price deregulation is critical for attracting investment
in the sector. It ensures that prices are market responsive, and it
gives very strong price signals to new investors and new developers
of generation to come to the marketplace.
"If we have a domestic gas reservation policy here you won't get
the right signals for new investment and new generation to come
into the market and therefore you run the potential of energy
security risk going forward.
"The government needs to work with industry to ensure the
development of domestic gas here in Queensland and New South Wales,
so that we don't have a gas shortage and an energy shortage in
Bureau Resources and Energy Economics (BREE), Executive
Director and Chief Economist, Professor Quentin Grafton
said: "It's hard to predict where gas prices are going,
not only in a domestic sense but also globally...because
essentially there have been very rapid developments, particularly
in unconventional gas."
Professor Grafton said that Qatar and west Africa were
Australia's global LNG competitors. He also said north America also
has particular implications for the Asia-Pacific market with
exports from North America likely to happen in the near future.
There is currently large price parity between the Asia-Pacific
gas price and the US Henry Hub, but this should decrease in the
future as exports come through from Canada and the US, in the not
so distant future, with pending regulatory approvals and the Panama
Canal expansion, he said.
"The Asia-Pacific gas prices will ultimately have an impact on
the prices that we'll be paying for gas here in Australia," he
Media coverage included:
Mark Macfarlane and Richard McIndoe's calls for gas sector
regulatory reform, at the CEDA Energy outlook: future for
gas event in Brisbane, were reported in The Daily
Telegraph on 19 April 2012 and The Financial Reivew, The
Australian and The Courier Mail on 20 April 2012.
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