LNG imports are the only means of securing sufficient gas supply for Australia’s east coast in the near future, according to analyst EnergyQuest.
In its latest report, EnergyQuest said additional gas supplies are “urgently needed in the southern states, particularly Victoria” for a variety of applications, including manufacturing, commercial use and for home heating, cooking and hot water.
“EnergyQuest is not alone in voicing concerns about the outlook for southern gas supply, which have also been expressed repeatedly by AEMO and the ACCC, the “official family” when it comes to assessing the outlook for gas demand and supply,” the report said.
“There is also the prospect of import projects reducing gas prices.
“According to the Expert Witness Statement of Dr Jerome Fahrer of ACIL Allen, the Crib Point project would reduce Victorian gas prices on average by more than $1/GJ, providing an aggregate benefit to gas users of up to $3.1 billion.”
EnergyQuest also said Santos’ recently approved Narrabri Gas Project – a development Santos CEO Kevin Gallagher has repeatedly said would provide gas at a lower price than any import terminal –could coexist with import projects, contending the market will still need more gas than Narrabri can provide.
“Santos’ greenlight for the Narrabri project will not deter LNG importers from their collective $1.5 billion investments,” said EnergyQuest.
“Australian Industrial Energy’s LNG import terminal at Port Kembla south of Sydney, and the South Korean-backed Energy Projects and Infrastructure Korea (EPIK) terminal in Newcastle aim to be operational by 2022 or 2023, insisting the market will need imports even if Narrabri gas is developed.
“EnergyQuest agrees with this assessment.”
The energy analyst said new developments like Arrow Energy’s Surat Basin acreage would provide some gas to the domestic market, but would most likely feed QCLNG, while it also expected up to two of Gladstone LNG’s trains to be closed as volumes are diverted to the domestic market from exports.
Australia shipped 6.2 million t of LNG across 91 cargoes in September, down from 6.6 million t (96 cargoes) in August.
For more information visit the EnergyQuest website.
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