Australia's LNG Export Focus Impacting Future Investment
An Energy Users Association of Australia (EUAA) study has forecast that the eastern Australian gas sector’s shift to an export focus to support major liquefied natural gas (LNG) projects will significantly affect future employment and investment.
The EUAA, Australia’s peak industry body for energy users, released a scoping study this week exploring the potential impact of high gas prices on the industry and economy.
In its findings, the EUAA explained that the eastern Australian gas market had transitioned from a domestic focus to an export focus to support the major developments.
According to EUAA Chief Executive Officer Phil Barresi: “Subsequently, industry has experienced significantly higher gas prices and an inability to constructively negotiate long term gas supply contracts.
“For some time now we’ve been ringing the alarm bells about the difficulty facing domestic gas energy users in securing predictable supply at competitive prices.”
A key finding from the study indicated a decline in employment of up to 3,300 jobs by 2020, along with reduced capital expenditure of more than $1.72 billion (AUD $1.9 billion) during that period.
The three LNG plants currently under construction in eastern Australia – Australia Pacific LNG, Queensland Curtis LNG and Gladstone LNG – have an associated capital expenditure estimated at $54.4 billion (AUD $60 billion), the EUAA said.
“Once operating, approximately half of the value created by LNG proponents will remain in Australia, reflecting the high foreign ownership of the LNG proponents,” Barresi said.
“Australia has some of the largest gas reserves in the world. What we’re distinctly lacking, however, is sound policy from all levels of government to resolve this very real issue.”
The EUAA commissioned Marsden Jacob Associates to undertake the study.
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