From the AFR:
NSW and Victoria may have to consider importing LNG from Queensland or PNG if the states don’t act to get onshore gas out of the ground, even though it would be a costly solution to the current stalemate, Shell Australia chairman Andrew Smith has suggested.
Mr Smith told the APPEA oil and gas industry conference in Brisbane on Monday that the time has come to “think creatively” about how best to serve local gas customers to ensure they have adequate and reliable supplies.
“I, for one, have mused about importing LNG to our nation’s largest city,” he said.
“If we choose not to act on declining gas fields, the idea of constructing a re-gas terminal in Port Botany may fast become a viable alternative for the industry.”
“In the short term LNG imports would introduce new supply and competition into the New South Wales gas market.”
You can’t blame the man for trying. We’ve been so catastrophically stupid on gas policy that he has every right to think that we might just agree. Then Shell would have created a new seaborne gas customer to help absorb the global glut plus drive up south east coast gas costs above export net back, adding a nice margin to piped gas. It will have distracted the yokels for a few years too.
We could build this duplicate infrastructure and import from the US. It doesn’t sound very efficient, especially when you consider that the east coast market would then be paying for the capex and opex costs for gas to be extracted, frozen, shipped, unfrozen and piped to Sydney consumers, but that is a secondary consideration.
What matters here is markets are doing the job. Where would be if those damn communists installed their retrospective gas reservation policy forcing the Gladstone three to sell 15% of their gas to locals at cost plus a regulated margin? Stuffed, mate.
While, we’re at it we should import some iron ore too, We could fill a few holes in the Pilbara with Brazilian soil then dig it up again and re-export to China. We’d be miles ahead!
