Page 4 - GLNG Week 32

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Australian gas crisis sees battle lines drawn
The petrochemical sector is lobbying the government to consider its needs ahead of those of the gas export sector
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Chemistry Australia claims gas-based manufacturers add more value to gas production than lNG exports.
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The body wants the government to introduce measures to reduce gas prices.
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AppEA has slammed the claim, but manufacturers have a great deal to gain by doubling down on this position.
AUStRALIA is on track to become the largest exporter of liqui ed natural gas (LNG) over the next year, eclipsing Qatar in the process. As it does so, the battle at home between exporters and consumers is heating up, with industrial bodies on both sides of the divide ring warning shots at the other.
Australia’s LNG export capacity has increased from 2.6bn cubic feet (73.63mn cubic metres) per day (20.32mn tonnes per year) in 2011 to more than 11.4 bcf (322.85 mcm) per day (89.09mn tpy), according to data from the Aus- tralian Department of Industry, Innovation and Science (DIIS).
Consultancy EnergyQuest estimates that Australian LNG exports in nancial year 2018- 2019 climbed by 21.2% on the year to 75.1mn tonnes; Qatar has a nameplate capacity of 77mn tpy.
While Australian exports only surpassed Qatari shipments in November 2018 and April this year, this is set to change when a number of recently commissioned projects – such as Wheatstone, Ichthys and Prelude Floating LNG (FLNG) – reach full capacity.
e DIIS has forecast that exports will grow to a consistent 10.8 bcf (305.86 mcm) per day (84.4mn tpy) by nancial year 2020-2021. is expansion, however, is only set deepen tensions within the domestic natural gas market. Austral- ia’s rise as an LNG power has driven up gas prices at home, causing industrial consumers to exert mounting pressure on the central government to introduce measures to rein in in ation.
A question of importance
the Australian petrochemical industry has released a new report to highlight the economic bene ts of gas-based manufacturing, noting that the sector adds more value to the economy than LNG.
Chemistry Australia’s report, the Chemi- cal Sector Economic Contribution Analysis, highlights the sector’s importance to the wider economy and warns of the fallout should prices remain unchecked.
Chemistry Australia CEO Samantha Read said the petrochemical sector contributed
A$38bn ($25.78bn) to Australian GDP and directly and indirectly supports hundreds of thousands of jobs.
She added: “ e sector underpins more than 1,600 full-time equivalent jobs for every peta- joule [41.68 bcm] of gas it uses. is is impor- tant, because when you look at other industries that use gas, the number of jobs the chemical industry supports is much higher: 80 times higher than LNG, and 150 times more than the gas- red electricity generation sector.”
She said the sector added A$286mn ($194.1mn) of value to every petajoule of gas it used, noting that this was 33 times higher than the LNG industry and 68 times greater than gas- based electricity generation.
She said: “Australians receive A$277mn more in economic bene t from a petajoule of gas that goes through the chemistry industry than they dofromapetajouleofgasgoingtoLNGexports.”
While she said the numbers did not mean “these industries are less important to the econ- omy”, her comments suggest otherwise.
She added: “ e [gas supply] crisis is impact- ing investment decisions of companies in the chemistry industry today and future investment considerations, which is a signi cant lost oppor- tunity for Australia. In the current climate of slow economic growth and declining economic complexity, we can’t a ord to lose investment in an industry that makes such a large and valuable contribution to the economy.”
APPEA responds
e implications of Chemistry Australia’s report were not lost on the Australian Petroleum Pro- duction and Exploration Association (APPEA), which was quick to slam publication.
CEO Andrew McConville said Chemistry Australia was trying to turn the discussion on Australian gas into an “us versus them” debate.
McConville said: “Both manufacturing and oil and gas production are key sectors of the Aus- tralian economy. Attempts to compare funda- mentally di erent industries and portray them as being in competition with each other does little to contribute to an important debate. We do not need to choose between the two.”
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w w w . N E W S B A S E . c o m Week 32 15•August•2019