Queensland natural gas producers continue to show their willingness to make major investments to increase supply for the tight East Coast gas market.
The latest demonstration of this was this week’s announcement by Santos and its Gladstone LNG (liquefied natural gas) partners that they will spend $900 million to develop resources in three different areas of coal-seam gas resources in south-western Queensland.
It follows announcement of a $100m domestic supply deal supply deal by Santos earlier this month as well as recent announcements by other producers which have painted a clear picture of an industry banding together to meet the needs of both domestic and overseas customers, to the benefit of state and national economies.
The positive result of this effort and investment is that supply pressure has eased and prices have been falling, as confirmed by the Australian Consumer and Competition Commission and industry analysts.
In other words, the gas industry is taking care of business, both domestically and internationally, to the benefit of all Australians. And the environmental calamity being predicted by activists for the past decade simply has not occurred – and is showing no signs of doing so.
The Santos $900m announcement was welcomed by the Queensland Government – and should be welcomed by thousands of industrial manufacturers and small businesses south of the Queensland border, who are crying out for confidence of supply and lower gas prices.
Queensland Resources Minister Anthony Lynham said the Santos investment decision was a “welcome sign of confidence in Queensland”, which was now “producing 70% of the total East Coast gas supply”.
“This development will offer400 new jobs, as well as significant local business opportunities,” he said.
Queensland Resources Council (QRC) Chief Executive Ian Mcfarlane said the Santos announcement would boost supply to the domestic and export (LNG) markets.
“Today’s announcement will bring intergenerational benefits for the people of these regions,” he said.
“More gas being produced is good news for all gas customers, both domestic and export.“
The Queensland Director of the gas industry representative group, APPEA, Rhys Turner, said the Santos announcement was the latest in a string of new Queensland projects designed to bring more gas supply to market.
“In the past year we have seen significant announcements from Arrow Energy, Shell Australia, and Senex to bring on new supply,” Mr Turner said.
“While other states dither or, worse, lock-up urgently needed gas resources, Queensland is getting on with the job. The Queensland Government recognises that the only way to put downward pressure on prices is to increase supply.”
In a statement, Mr Turner said the Queensland economy was a major beneficiary of gas development.
“In 2015-16 alone, Queensland’s gas industry directly and indirectly supported almost 40,000 jobs, and provided more than $12 billion in total value-added activities in the state through direct, indirect and consumption-based activities.
These significant benefits are being denied people of NSW and Victoria, where there are substantial onshore natural gas resources, but a political reluctance to extract them for fear of opposition from the Greens and enviro-activist groups. Meanwhile thousands of businesses and millions of consumers pay more for their gas because it has to be transported long distances.