PERTH (miningweekly.com) – The federal government is committed to the continued development of the country’s liquefied natural gas (LNG) sector, with Resources Minister Madeleine King saying the sector will be an integral player in Australia’s move to a net-zero future.

Speaking at the Asia Pacific Oil and Gas conference, in Adelaide, King noted that Australia’s large offshore gas resources generated valuable export earnings and provided highly skilled jobs.

Australia’s LNG export earnings were forecast to rise from an estimated A$70-billion in 2021/22 to A$90-billion in 2022/23, driven by rising global energy prices, providing an incentive for many LNG facilities to operate at or above capacity for the last 12 months, King said.

Importantly, there was an increase in Petroleum Resource Rent Tax Revenue from A$897-million in 2020/21 to A$2.17-billion in 2021/22. 

“Australia will continue to support the needs of local industry and local communities as well as support the growth in global gas demand among our important regional neighbours,” King told delegates.

“Australia’s large upcoming offshore developments, including the Scarborough, Dorado, Crux and Browse projects, represent an investment of over A$50-billion. Developing large offshore gas resources will ensure that the Australian LNG industry can maintain production.

“In doing so, it will remain globally competitive and continue to generate valuable export earnings for Australia.

“Our commitment to the sector is steadfast. Our position is that oil and gas projects can proceed if proponents are able to fund them and they pass the required environmental approvals, including on emissions,” King said.

She noted that gas was also central to supporting Australia’s electricity grid, and was less emissions intensive than other fossil fuels and can be used to boost the reliability of an electricity grid increasingly powered by renewables.

“Natural gas will be a critical fuel in the decarbonisation of Australia’s economy. Gas provides a reliable, cost-effective energy source for peak winter heating, seasonal storage and high temperature heat for industry.

“It can also ensure long term energy security for Australian households and industry as well as our core trading partners.  

“Australian LNG will have a key role to support the decarbonisation ambitions of our trading partners, particularly in north Asia. Our north Asian trading partners invest in our gasfields to help them navigate away from coal power generation, through gas and eventually to hydrogen and other cleaner energy sources.”

King pointed to reports from the International Energy Agency (IEA), which showed that from 2010 to 2018 global coal-to-gas switching has saved around 500-million tonnes of carbon dioxide (CO₂), which was equivalent to putting an extra 200 million electric vehicles’ running on zero-carbon electricity on the road over the same period.

“An Australian resources sector that is reducing emissions will be well placed to export ‘premium’ products that are low emission and environmentally responsible,” King added.

“Australia is leading the way with carbon neutral liquefied natural gas cargoes being shipped from Australian LNG projects to our trading partners. Carbon capture, utilisation and storage (CCUS) presents an opportunity to decarbonise Australia’s energy exports, particularly gas processing, LNG activities and potentially hydrogen.

“At the same time, it can help us achieve our climate change mitigation objectives.

“The IEA and the Intergovernmental Panel on Climate Change (IPCC) recognise CCUS as essential to reaching global net zero by 2050 targets. Australia has a strong comparative advantage regionally and globally when it comes to CCUS and is well placed to become a world leader in this emerging industry.

“Australia has potentially over 20-billion tonnes of suitable geological CO₂ storage capacity. I look forward to welcoming new offshore CCS projects, as a result of greenhouse gas storage assessment permits recently awarded.

“We also possess extensive experience and skills in the resource sector, which are directly transferable to low emissions technology,” King added.