Gas production increasing and flowing south from Queensland

September 6th, 2017

ERIC letter to the editor at The Australian Financial Review:

Gas now freely flowing south, The Australian Financial Review, pg 43

 

Australian natural gas production for export and domestic use increased significantly in the last financial year, according to figures released today by independent energy consultant, EnergyQuest.

This is good news for Australia’s economy and the East Coast gas market, which has been tightening in recent years as supply from Bass Strait and South Australia’s Cooper Basin has fallen.

In addition to meeting domestic demand, increased gas exports (in the form of LNG, or liquefied natural gas) are very good for the national economy, as noted by the Reserve Bank of Australia this week, and by industry representative group APPEA, last month.

In the most recent full year, natural gas production has lifted in Bass Strait and Queensland – and recent announcements in SA and Queensland suggest this trend will continue in 2017/18.

Importantly, the EnergyQuest report notes that gas has been flowing freely south from Queensland for the past three months.

This underlines the industry response noted in our letter to the editor of the AFR, sent earlier this week and published today: The activist claimed ‘one-way track’ to export for our natural gas is  simply wrong; and the industry is actively responding to domestic needs.

……

ERIC Director Steve Wright’s Letter to the Editor, 6 September 2017 

Anti-gas activists are fond of talking about how LNG export plants operating on the Queensland coast are “sucking all the gas north” and leaving southern states in the lurch.

Recent statements by onshore gas producers have shown this to be nonsense – and the Financial Review confirmed this in its article on progress in the balancing act that is meeting both export and domestic gas needs as Australia heads toward a very positive status as the world leader in global supply of LNG.

What the Matthew Stevens’ article “Tough stance on gas not just hot air” (September 4) illustrates is that the government’s domestic-supply message has been heard.

As much as 350 terajoules of gas is now flowing south each day – a substantial amount given that total daily demand for NSW is about 400 tj.

Recent announcements by Shell and Santos have shown the industry willingness to embrace the government challenge and alter their plans to accommodate areas where supply is tight. Innovative domestic swap deals have helped facilitate this breakthrough.

Statements by pipeline owner APA Group reinforce that, in contrast to the erroneous activist claims, there is not only a capability to move gas north and south, but that direction can be changed on short notice.

An obviously proud pipeliner, APA Group CEO Mick McCormack, said the directional flow of gas (which sometimes travels thousands of kilometres) can now be changed on a day’s notice. Perhaps there was a touch of indignation in his comment as well, as the company has reportedly spent $100 million to introduce this and other capabilities, which he said made APA a global pacesetter for gas transportation.

At a recent business function in Sydney, Mr McCormack expressed some frustration at public comments which so often misrepresented the intention and the actual practice of the industry. As a major contributor to cleaner LNG substitution for coal-powered electricity, environmentalists ought to be applauding the new export industry, which is also very positive for the Queensland and Australian economies.

Steve Wright
Director, Energy Resource Information Centre

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