Queensland LNG to outstrip current national production by 2020

Queensland will produce more liquefied natural gas (LNG) than Australia’s total current production rate within nine years, according to forecasts released in August.

Queensland LNG capacity is set to reach at least 25 million tonnes by 2020, according to the report Australian Coal Seam Gas 2011: From Well to Wharf, a 260-page annual review of the industry produced by energy economics group, EnergyQuest.

“The demand for Queensland LNG from Asian buyers has been outstanding, considering that LNG from coal seam gas (CSG) has never been done before,” EnergyQuest chief executive officer, Dr Graeme Bethune, said.

“Twenty-five million tonnes is more than Australia’s current LNG production of 20.8 Mt in the 12 months to 30 June this year.”

Further expansion of Queensland’s LNG capacity to around 32 Mt (eight trains) looks feasible by the mid 2020s, subject to continued Asian demand and the delineation of sufficient reserves.

Labour shortages are likely to be a major constraint on projects meeting their timetables. Shortages are only beginning to emerge but are expected to intensify in 2012, particularly for project subcontractors.

Dr Bethune said the report found that companies are getting on top of land access and community issues, including making substantial financial contributions to local community programs.

“However, there is a strong feeling that local communities and local government bear a disproportionate share of costs of development, with state and federal governments benefitting from a disproportionate share of increased revenue,” Dr Bethune said.

“This is a financial issue between levels of government.”

The impact of CSG and other resource developments on housing costs and availability is also a matter of concern to communities, Dr Bethune said.

“While the LNG projects dominate CSG activity, there is other substantial CSG exploration acreage outside the LNG projects in Queensland and NSW,” he said.

“With some exceptions, much of this acreage is held by junior companies in the early stages of exploration.

“While some of it may ultimately be developed to supply the domestic gas market, this seems a long way off.”