Gas supply fears for Curtis Island LNG plants, new report finds

CONCERNS have been raised over the availability of coal seam gas in Queensland for Gladstone's three liquefied natural gas plants.

The latest comments on CSG availability comes from three analysts who wrote the 2017 oil and gas outlook report from National Australia Bank.

Santos' GLNG project at Curtis Island.
Santos' GLNG project at Curtis Island.

Part of the 13-page report highlights the challenges Gladstone's three sites - Australia Pacific LNG, Gladstone LNG and QCLNG - face with securing gas in the future.

"It remains unclear whether sufficient gas can be economically extracted from Queensland's CSG fields for LNG export, particularly if LNG export prices remain low," it reads.

>> CEO to give industry update in Gladstone

>> Gladstone LNG site boosts Santos production, exports and cash

"Indeed, Santos' August 2016 $1.5 billion write-down of its GLNG terminal partly relates to issues sourcing a sustainable source of feed gas."

Gladstone's three LNG sites converts coal seam gas to LNG for international export.

National Australia Bank's oil and gas outlook for 2017 outlines concerns about future CSG supply for Queensland's three LNG sites.
National Australia Bank's oil and gas outlook for 2017 outlines concerns about future CSG supply for Queensland's three LNG sites.

If the forecast 70 million tonnes of LNG leave Australia in 2018, it will overtake coal in Australia's export market.

But it also found while Australia's LNG industry was "ramping up", it was progressing slower than expected.

"Global LNG prices have fallen significantly since mid-2014 on the back of lower oil prices, to which many LNG contracts are tied," the report says.

"... New supply from competitors will place further pressure on the market."

In December analyst Wood Mackenzie analyst Matt Howell also raised CSG concerns and said already GLNG was using a "substantial amount" of third party gas to fill their train.

One of Curtis Island's LNG facilities.
One of Curtis Island's LNG facilities. Santos

Santos fourth quarterly production report for 2016 confirmed the GLNG site had run almost half of its full capacity that year.

The Curtis Island plant is able to produce 7.8 million tonnes of LNG, yet in 2016 it produced 4.6 million tonnes.

Meanwhile Blue Energy is gaining interest for its proposed 200km pipeline to connect northern and southern gas markets, a project they say will help boost supply in Gladstone.

Listen to Blue Energy CEO John Phillips:

The proposed pipeline would run from the Bowen Basin CSG province in Moranbah, through Emerald, to an existing pipeline at Denison Trough North.

"There's a growing gas shortage on the east coast from 2018 onwards, which has to be supplied from somewhere," chief executive officer John Phillips said.

Stay Connected

Update your news preferences and get the latest news delivered to your inbox.

How to stop Facebook from grabbing your data

How Facebook can grab your data, and what to do to stop it

UPDATE: Jockey remains in ICU at Coffs Harbour

INJURED: Jockey Kirk Matheson was injured in a fall during racing at Clarence Valley Jockey Club.

Injured jockey Kirk Matheson rushed into surgery.

PHOTOS: Meet our kindy students

Newrybar Public School

My First Year commemorates the start of school for kinders

Local Partners