Australia to start importing LNG?

New South Wales and Victoria may have to consider importing liquefied natural gas due to the looming gas shortage in the two states, according to Andrew Smith, Chairman of Shell Australia.

Speaking at the APPEA conference in Brisbane on Monday, Smith said the time has come to think “creatively about how we best serve our domestic customers, and ensure we have adequate and reliable gas supply“.

According to Smith, importing LNG to Sydney could be an option if governments in Victoria and New South Wales persist with “moratoriums that stifle the development of additional reserves“.

“I for one have mused about importing LNG to our nation’s largest city. 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,” he said.

Smith said that, in the short term, imports of the chilled fuel would introduce new supply and competition into the New South Wales gas market.

“In the current climate, I could see the rationale for such a suggestion – as LNG prices are historically low and pricing structures for pipeline capacity limit gas flow. However, the overall benefits are unlikely to outweigh the costs and there are impacts for the effective operation of the east coast gas market.”

“Of course importing gas from Curtis Island or PNG LNG would come at a cost to customers – particularly if LNG prices recovered to anywhere near 2013 levels,” Smtih said.

LNG World News Staff