Caution over Qld LNG's rapid-fire success

QUEENSLAND Premier Annastacia Palaszczuk has hailed the resources sector’s ability to build an LNG export industry in the space of seven years as an “incredible achievement”, but says she is also keeping a wary eye on commodity prices as the state looks to boost its economy.

Anthony Barich

Celebrating BG Group’s QCLNG project becoming the world’s first facility to produce LNG from natural gas, Palaszczuk said Queensland’s overseas merchandise exports were up 10.8% between the March quarter this year and the March quarter last year.

“This is due to a rise in exports of meat, coal and the first three months of LNG shipments,” Palaszczuk said.

“This is an industry made possible thanks to the foresight of the previous Labor government to embrace what was then an industry of the future.”

The QCLNG plant production is expected to plateau at eight million tonnes per annum during 2016, sending around 120 shipments a year to China, Japan, Singapore, India and Chile.

However, speaking to journalists after her speech, the Premier acknowledged that the anticipated $A500 million royalty bonanza was no longer on the cards and suggested that the new Labor government’s first budget next month would contain the revised figure.

“We do know that there has been a downturn in commodity prices," Palaszczuk said.

“However, this is a large industry; this is an industry that will be around for decades to come.”

Federal Industry Minister Ian MacFarlane, on the other hand, was more contrary about forecasts when speaking to journalists at the launch on Curtis Island.

He said the crude oil price plummet’s impact on the LNG industry was nothing to be overly concerned about.

“That's all part of the commodity cycle and the reality is that anyone building a plant like this would know that gas prices cycle up and down,” he said.

State Development Minister Anthony Lynham said gas was set to play a large part in fulfilling the world’s future energy needs.

“Queensland is in the enviable position of having more than 90% of eastern Australia’s proven and probable coal seam gas reserves within the Surat and Bowen basins,” he said.

“Thanks to projects like this, Queensland is well on track to not only meet the demand, but to do so in a sustainable and responsible way.”

Once all three LNG producers at Curtis Island are fully operational, it is estimated they will produce 25MMtpa of LNG for export.

Member for Gladstone Glenn Butcher said the resources sector was “absolutely vital” to Queensland and regional centres like Gladstone, supporting more than 78,000 jobs.

“That’s why we support responsible and sustainable development of the resources industry,” he said.