The Australian Petroleum Production & Exploration Association (APPEA) released its State of the industry 2009 report at the Conference, setting an industry target to increase Australia’s liquefied natural gas (LNG) capacity from 20 million tonnes per annum (MMt/a) in 2008 to at least 50 MMt/a by 2017.
For the decade to 2017, APPEA has also set targets to see that oil and condensate production, as a proportion of liquid fuels consumption, is maintained at the 2006 level of 57 per cent or better, and the use of natural gas, for industrial purposes and as a competitive feedstock for resources processing, doubles.
The report states that achieving these targets would ensure that approximately 180 MMt/a of carbon dioxide equivalent is avoided globally by 2017. The targets could also see increased regional development, particularly in Western Australia, Queensland and the Northern Territory.
Wood Mackenzie’s latest report, Australasian LNG – the leading pack approaches their final hurdles, similarly stipulated that an LNG production capacity of 50 MMt/a by 2017 is achievable.
Wood Mackenzie Lead Analyst of Australasia Upstream Research Richard Quin said “We believe there is now sufficient momentum behind [projects such as] PNG LNG, Gorgon and Queensland Curtis LNG, to give the participants confidence to sanction investment, which will more than double Australasian LNG capacity, to over
50 MMt/a by 2017. This will require over $74 billion of capital investment, whilst creating up to 15,000 jobs in Australia and Papua New Guinea during the construction phase.”?
Federal Minister for Resources and Energy Martin Ferguson said in his Conference address “Developing Australia’s gas resources for LNG – underpinned by long term supply contracts into Japan, China, Korea and Taiwan – is one of our most prospective opportunities to buffer the economy in the near term and kick start a new boom in the medium to long term.
“The challenge for the Australian Government is to maximise the growth and competitiveness of our LNG industry, provide the right policy settings to increase our share of investment in it, and unlock the wealth of our gas resources for the benefit of the nation.”?
Also at the conference, Woodside Petroleum Managing Director Don Voelte and ConocoPhillips Senior Vice President of International Exploration and Production Ryan Lance said that demand for LNG will remain steady through the economic recession.
“Despite the economic downturn, we remain confident in the long term demand for LNG,”? Mr Voelte said. “Our core customers in Japan, Korea and Taiwan have little if any domestic gas supplies and are heavily reliant on LNG.”?
Mr Lance said “LNG will be the fuel for the future and the fuel of choice,”? stating that concerns about the international appetite for LNG were unfounded. He said that as companies turn their focus to climate changes and mitigating carbon emissions, LNG will likely be taken up instead of coal-fired power generation, particular within Asia.
Shadow Minister for Energy and Resources Ian Macfarlane noted that the significance of the LNG and coal seam gas industries must be fully recognised in the proposed emissions trading scheme (ETS).
In his Conference speech, Mr Macfarlane said the ETS is an obstacle the Australian Government is placing in the way of LNG development. He said it “casts a very long and ominous shadow over Australia’s energy security”?.
In regard to emissions-intensive trade-exposed industries, Mr Macfarlane noted “Coal has been excluded, while the LNG industry has had to fight tooth and nail for inclusion at the 60 per cent compensation rate, which has now been lifted to 66 per cent, after the Rudd Government’s most recent changes.”?
He called for the Australian Government to further consider the place of LNG in an ETS before pushing the legislation through Parliament.
In her closing address, APPEA CEO Belinda Robinson said that the association would continue its education campaign on the benefits of natural gas both as LNG and for domestic consumption.
“The fact is, it represents the way forward in moving Australia and the world to a less carbon intensive future,”? she said.