PERTH (miningweekly.com) – Federal Resources Minister Matt Canavan has alluded that the government would look at expanding the gas reservation policy to ensure continued gas supply to the east coast market.
Quoting data from the recently released report by energy commentator EnergyQuest, Canavan noted that east coast gas production reached a record 500.1 petajoules (PJ) for the third quarter of 2019.
This included record production of Queensland coal seam gas (CSG), which was up by 6.8%, or 23.7 PJ, quarter-on-quarter, to a record 377.2 PJ for the third quarter of 2019. The period also saw the largest surplus supply of gas since liquefied natural gas (LNG) exports began in January 2015.
National LNG production reached a record 20-million tonnes in the third quarter, up from 19.3-million tonnes in Q2 2019 and 18.1-million tonnes in the third quarter of 2018. LNG production in the third quarter also represented an annualised rate of 79.5-million tonnes, exceeding Qatar's nameplate capacity of 77-million tonnes a year, EnergyQuest said.
Queensland CSG has continued to supply southern markets, with increased flows going to New South Wales and Victoria.
“The Victorian government seems intent on shutting down industries, from vegetable processors to aluminium smelters operating in regional areas of Victoria while they pander to green activists and Greens in inner city Melbourne,” Canavan said.
The Minister said EnergyQuest also noted average short-term gas prices were down 7.8% at A$8.23 a gigajoule from A$8.93 a gigajoule at the same time in 2018.
“Analysis of data released by the Australian Energy Market Operator (AEMO) is showing that short-term prices are continuing to fall. Prices at the Wallumbilla Gas Supply Hub in Queensland were at A$7.17 a gigajoule for November 2019, down from A$9.95 a gigajoule in November 2018 and are down a whopping $5.32 a gigajoule from the average price of A$12.49 a gigajoule we saw in February 2017,” he said.
This was before the government took decisive action to put in place the Australian Domestic Gas Security Mechanism (ADGSM) in July 2017 and reached an agreement with the three LNG export projects at Gladstone to ensure gas supplies for the domestic market.
Both the AEMO and the Australian Competition and Consumer Commission have found that the ADGSM and the Prime Minister’s agreement have been effective in placing downward pressure on gas price offers and assuring gas supply, Canavan said.
He added that the government was working to keep downward pressure on gas prices.
“We recognise that many businesses are still doing it tough with energy prices and I am focused on keeping gas prices down so we have a vibrant manufacturing and processing sector in rural and regional areas,” he said.
“Western Australia has shown that a successful LNG export industry can survive and thrive with a gas reservation policy. I will ensure that gas is available and affordable for industry on the east coast as well, and will work with states and the Northern Territory and industry to implement a National Gas Reservation Scheme.”