Australian politician urges more diverse use of gas

GOLD COAST: Australia should be using some of its huge natural gas reserves to create a strong domestic gas-based manufacturing sector, a leading politician told an industry conference on Wednesday.


In its rush to export liquefied natural gas (LNG) to meet a tight global supply horizon, Australia could be missing an opportunity to diversify, said Clare Martin, chief minister of Australia's Northern Territory, which is a major hub for LNG production.

Martin said diverting relatively small amounts of gas to alternative projects would better serve long-term energy security and the national economy.

"As a country we have the opportunity to ride the next wave of energy demand," she said. "New world scale offshore gas projects will rise out of the sea at an increasing rate, from Western Australia around to the Northern Territory." "The question that needs to be asked is whether it's in Australia's interests to see every single molecule exported as LNG or whether our long-term development is better served by a broader strategy," she added.

Echoing recent comments from her Western Australian counterpart, Martin advocated investment in complementary gas-based industries, including methanol, ammonia, olefins and their derivatives, which could prove more cost-effective.

"They can deliver up to 4.5 times the capital investment and 10 times the employment per petajoule compared to LNG," she said. "Quite simply these industries provide more bang per petajoule." Martin, whose territory is home to a $A1.6 billion ($NZ1.98 billion) LNG processing plant and flagship projects such as ConocoPhillips' Bayu-Undan field and Woodside Petroleum's mooted Greater Sunrise field, both in the Timor Sea, recognised that market forces mean LNG would continue to syphon the lion's share of Australian gas.

But she said Australia has reserves of 150 trillion cubic feet of gas, with a potential value of between $A500 and $A750 billion, and called for federal policy settings to divert a fraction of domestic gas to alternative uses.

AdvertisementAdvertisement"It could add to our nation's self-sufficiency as producers of thousands of everyday products that rely on gas as either a feedstock or fuel," she said.

A recent government report forecast Australia's exports of LNG would rise 24 per cent year-on-year to 13.1 million tonnes in 2005/06, climbing to around 20 million tonnes by 2010/2011.