EnergyQuest: LNG imports “urgently needed”

EnergyQuest says southern Australian states need a new source of gas supply which can only be provided by LNG import projects.

A new report from the energy consultancy said gas production in southern states would start to shortfall demand by 2022 and by 2025 would be less than half of current levels.

While gas from Queensland could provide short-term relief, EnergyQuest Chief Executive Dr Graeme Bethune said a decline in production from the north would lead to serious supply shortages that, due to a current lack of new domestic gas discoveries, could only be fixed with import terminals.

“We also expect Queensland gas production to start declining from 2025, due to a shortage of quality gas resources,” he said.

“The east coast faces a double whammy of insufficient gas in both the north and south.

“Timing is critical and it is concerning that the regulatory processes in Victoria and New South Wales are dragging out, delaying decisions to go ahead with these new terminals.”

The EnergyQuest report said LNG import terminals could provide long-term contracts to gas users with transparent pricing, as well as provide increased competition on the east coast.

“There are fears that such project will lock the east coast into international gas prices but that has happened already,” said Dr Bethune.

“What will lock the east coast into even higher gas prices, however, are restrictions on new supply, LNG imports and exploration.

“LNG imports are not all that is needed. Development of domestic gas projects is also critical and should be more than competitive imports.”

The report said increasing reliance on Queensland gas would increase wholesale price delivered to Melbourne or Sydney to the $10-13 per GJ range.

For more information visit the EnergyQuest website.

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