THE start-up of gas exports from Queensland’s pipeline of LNG developments will underpin a surge in the state’s economic growth to an eleven year high from next year.
Announcing Queensland’s 2014 budget in June, in which a fiscal deficit of $2.27 billion was forecast for 2014-2015, Treasurer Tim Nicholls said the Queensland economy was expected to be the strongest performing State economy in the nation in 2014-15 and over the forward estimates period.
In 2014-2015, Queensland’s economic growth is expected to be 3 per cent, but that figure is forecast to double in 2015-2016.
“The ramp up in LNG production is expected to underpin a surge in exports which, combined with an improved domestic economy, is forecast to boost economic growth to an 11-year high of around 6%,” Mr said.
“This will be the highest in the nation.”
Mr Nicholls acknowledged the state’s economy was in a state of transition as the investment phase of the large LNG projects neared completion and the production and export phase approach.
“The transition is, in effect, the quantitative handbrake that constrains the headline growth rate in 2014-2015,” he said.
Unlike LNG, Queensland’s coal sector was struggling while the historically high Ausralian dollar was weighing on government revenues.
“Falling coal prices are adversely affecting our royalty receipts, and there has been no respite from the Australian dollar, which is stubbornly higher than we would like,” Mr Nicholls said.
The Australian Petroleum Production and Exploration Association (APPEA) said the Queensland budget highlighted the considerable value a growing natural gas industry can provide for the economy.
“Ten years ago there was barely a natural gas industry in Queensland,” APPEA eastern Australia chief operating officer Paul Fennelly said.
“Today we are looking forward to Queensland’s growth rate being the highest in the country off the back of gas exports.
“It shows what’s possible when companies, landholders, governments and the community work together to make the state’s natural gas industry not only viable but successful and safe.”
Queensland’s gas industry is spending around $70 billion on coal seam gas to liquefied natural gas (LNG) projects, with first exports slated for later this year. Queensland Curtis LNG will be the first cab off the rank to export, followed by Santos’s GLNG project and Origin Energy’s APLNG development.
As a result of the state’s flourishing gas sector, Mr Fennelly said a significant portion of the more than $2.8 billion in resources revenue will be coming directly from the gas industry.
“In fact, if resource industry royalty payments were spent solely on education they would fund almost 40 per cent of Queensland’s entire education budget,” he said.
“The Queensland Government, in stark comparison to NSW and Victoria, continues to show strong leadership. The result is that the people of Queensland benefit from the development of a new industry under strong and sensible regulations.”