By Andrew Hobbs
WITH all three of the Curtis Island oil and gas facilities set to commence production later this year, the Queensland state government has moved to ascertain what is next for the state’s industry.
Gas exports of $1.14 billion have been made from Queensland from January to July, with exports predicted to hit $15 billion by 2016- 2017, according to government figures.
When all three Queensland LNG projects are in an export phase, there will be enough LNG production to load 10 vessels per month combined.
Queensland minister for state development and natural resources and mines Anthony Lynham said the Queensland Gas Supply and Demand Action Plan would aim to encourage growth and new gas industry jobs in the state.
“This action plan will be an overarching strategy to maximise exploration, drive development, keep gas costs down and get maximum economic and job benefits for Queensland,” he said.
“Our gas action plan will aim to stimulate increased gas supply, optimise the economic recovery of gas resources, and leverage and build on the Commonwealth Government’s various gas and energy initiatives.”
In particular, the plan will focus on identifying barriers to achieving least cost supply, creating transparent market mechanisms and helping the state to capitalise on “all possible demand opportunities both domestically and internationally.”
“The action plan will examine the full spectrum of gas demand, business and employment opportunities in Queensland beyond what’s already happening or in the pipeline with liquefied natural gas production at Gladstone,” Dr Lynham said.
It comes at a time when the state’s gas industry is paying lucrative royalties for government coffers, with energy consultancy EnergyQuest announcing in September that the state was looking at a significant boost in royalties.
EnergyQuest chief executive Graeme Bethune said this boost would come despite theslump in global oil prices.
“The forecasts point to a growth in petroleum royalties for Queensland from $51 million in the financial year just ended to more than $518 million in 2018-2019, assuming a longer-run of oil prices of around US$70 per barrel,” Dr Bethune said.
“This is less than originally anticipated but still half a billion dollars into a state government’s coffers. Without LNG development, Queensland would have had $500 million per annum less to spend on health, education and other vital services.”
In its Queensland Business Outlook, Deloitte Access Economics said while the state now had the capacity to significantly increase resource exports, most Queenslanders would not feel the effects while commodity prices were at current levels.
“Mining, and in particular LNG, is expected to remain a key driver of the State’s headline economic growth figures, but without the unprecedented commodity prices of late, this will be an export story rather than an income story,” the report said.
“Going forward, widespread productivity improvements will be needed across all sectors to ensure sustained economic growth in Queensland.”
“To create a more diverse economy, Queensland should invest in assets and capabilities in industries where it has a competitive advantage.”
Australian Petroleum Production and Exploration Association (APPEA) chief operating officer for Eastern Australia Paul Fennelly told Oil & Gas Australia that the Queensland Gas Supply and Demand Action Plan would be a success if it worked to encourage the ongoing growth of the gas industry.
“From our point of view everything should be on the table and we should be very open and very mature about what needs to be confronted if we are going to improve the competitive position of the industry,” he said.
“Ultimately we want more investment in the industry in the years to come. We want a globally competitive environment.”
Mr Fennelly said the creation of the gas plan was recognition by the Queensland government that this was a globally significant industry.
“Traditionally any discussion about petroleum, we have been locked in with coal, base metals – you get the picture,” he said.
“This is the first time in any standard way that the Queensland government has looked at the industry and asked, how do we improve the competitive position, how do we reduce regulation, how do we streamline environmental approval and how do we reduce costs?”
“How do we develop the Cooper basin, what are the issues we need to confront with the Cooper basin? How can we work cooperatively with the SA and NT governments in terms of the regulatory regime so that companies which operate in cross border environments aren’t having to jump between different regulations?
Those types of issues are critically important.” An issues paper relating to the gas action plan will be released for consultation later this year with the final plan expected to be completed in the first quarter of 2016.