Queensland’s APLNG directs more gas to domestic market

PERTH (miningweekly.com) – The Australian Pacific liquefied natural gas (APLNG) project, offshore Queensland, will supply an additional 41 PJ of natural gas to the Australian domestic market, operator Origin Energy reported on Thursday.

The new contract increased the APLNG project’s total domestic contracted supply commitment for 2018 to over 186 PJ, representing nearly 30% of the Australian east coast domestic gas market demand.

The 14-month contract, which starts in November, will see APLNG deliver 4 PJ over the remainder of 2017, and 37 PJ in 2018.

APLNG CEO Warwick King said on Thursday that the additional gas formed part of the LNG industry’s commitment to make more gas available to the domestic market to address the shortfall predicted for 2018.

“We have been absolutely clear from day one that APLNG is committed to the Australian domestic market and we continue to do the heavy lifting in meeting domestic demand for gas.”

Environment and Energy Minister Josh Frydenberg said on Thursday that the additional gas would help cover the forecast shortfall in domestic gas supplies of up to 107 PJ in 2018 and 102 PJ in 2019, identified by the Australian Energy Market Operator.

“The deal with the gas producers meant the government did not need to pull the trigger on the Australian Domestic Gas Security Mechanism for 2018, which would have imposed export restrictions.

“Since the coalition government’s intervention we have seen more gas supplied to the domestic market and the spot price drop from as high as $14 to $16/GJ earlier this year to around $6 to $8/GJ today,” Frydenberg said

“More affordable gas is important as gas-fired generators are setting the prices of electricity more than they have in the past as coal-fired generators exit the system.

“This is a positive outcome and will bring welcome relief to Australian households and businesses who have been struggling with tight supply and high prices.”

The Queensland Resources Council has welcomed the decision by APLNG.

“Queensland’s neighbours must take a leaf out of our book, instead of relying on our state to meet the gap caused by their failure to develop their own gas industries. Gas exploration has stalled in New South Wales, Victoria and the Northern Territory, despite the fact all jurisdictions have their own reserves in the ground,” CEO Ian Macfarlane said.