25 January 2017

Queensland Government offers template for future gas development

The Queensland government’s gas pilot project provides a template for how gas could be developed in Eastern Australia in future, striking a better balance between the needs of export and domestic gas customers.

Manufacturing Australia Chairman, Mark Chellew, said today that the Queensland government deserved praise for trying something new to address the energy policy impasse that is threatening many manufacturers.

“If gas intensive manufacturing is to continue in Australia we need more gas, more gas suppliers and the right policies in place to ensure new gas development actually benefits local businesses,” Mr Chellew said.

“Queensland has lots of gas. We should be able to have the best of both worlds: gas for manufacturing and gas for export,” he said.

Natural gas is vital to many manufacturing industries. It is an essential feedstock in manufacturing plastics, chemicals, fertilisers and explosives, and a favoured energy input in other manufacturing industries, especially alumina, bricks, cement, float glass, steel, paper and roof tile production.

But in recent years, manufacturers have struggled to secure long term gas contracts on competitive terms in a gas market that has been transformed by liquefied natural gas (LNG) exports.

Manufacturing Australia’s Executive Director, Ben Eade, said the pilot project in Queensland wouldn’t provide a quick fix for the energy challenges confronting manufacturing, but said it was one piece of the puzzle that he hoped would bring some new gas into the market and ensure that gas benefits domestic users.

“Manufacturers don’t actually need much gas compared with the volumes committed to export. But they do need to have confidence that their gas supplies are secure in order to justify ongoing investment. That’s what this pilot project is trying to achieve,” Mr Eade said.

“Time will tell just how the project works and how the market responds, but we think it could provide a template for future gas development in Eastern Australia.”

Manufacturers in Queensland employ more than 160,000 people directly. They contribute more than $20bn to the State economy and spend over half a billion dollars on R&D.

“Manufacturing matters in this State. The families and communities that rely upon manufacturing already know that, and its encouraging that the Queensland government knows that too,” Mr Eade said.  


Media contact: Ben Eade, Executive Director, 03 9023 9117