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BRISBANE, Australia—Australia could consider taking drastic action to import gas from the United States to alleviate the country’s east coast gas crisis—a farcical scenario considering Australia is the world’s biggest exporter of LNG—Australian Federal Resources Minister Matt Canavan said at the APPEA Conference.
Speaking at an annual event he referred to as “my favorite conference”, Canavan, in one of his first post-election appearances that kept the Liberal-National Coalition in power, delivered a strong message of support to Australia’s oil and gas industry and a hard-hitting rebuke of its opponents.
Having initially said that Australia does “not benefit from the cheap gas prices coming out of America, because we don’t have any import terminals,” Canavan later revealed that rapid progress was being made to approve five LNG import terminals in the manufacturing intensive states of New South Wales and Victoria. Both states are laboring under high-energy costs that threaten both jobs and the competitiveness of companies located in those regions.
Asked if Australia could look to Gulf of Mexico LNG and import gas to ease the burden, Canavan stressed that government policy was to ideally discover and develop affordable Australian gas. However, he also suggested he was open to competitive options from abroad.
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He said West Australian mining magnate Andrew Forrest’s plan for an import terminal at Port Kembla, south of Sydney, to receive LNG gas from the North West Shelf had already received some approvals and was well advanced. Other import terminal in Melbourne and Newcastle were also under consideration.
“The government and I have always said we support the development of supplies in Australia. I don’t care if the gas comes to Melbourne or Sydney via pipeline, by ship or by hot air balloon—whoever can get the gas there as cheap and reliably as possible. Because the ultimate aim is to supply and make our gas markets work efficiently,” he said. “It’s about the development of our gas resources but also about providing gas at the most important price we can to the consumers of Australia.”
“We are very passionate as an Australian government to support new oil and gas basins right across Australia, Canavan added. He named several proposed gas projects in Western Australia and Queensland as high-profile priorities under his portfolio.
“There are a lot more battles to fight,” he said. “And we we’ve got it again over in Western Australia, where I can’t believe this out of control Environmental Protection Agency has again put out guidelines saying that apparently they can change the temperature of the globe from an office in Perth. I thought we had defeated this a few months ago, and I do recognize the efforts of the industry and (Woodside CEO) Peter Coleman to come out against this, but again it’s come back on the agenda.
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“I just plead with the WA government to knock this on the head as soon as possible. This policy approach is both ineffective from the WA EPA and it’s counter productive. There is no way that imposing a net carbon neutral obligation on projects in WA is going to have any impact on the world’s climate. It is again out of step with the views of the Australian people, who rejected the policy position taken by the (political) opposition on this position that goes beyond the rest of the world.”
He said Australia had an opportunity to expand its global influence as the world’s biggest LNG exporter and to secure domestic gas supplies to shore up jobs and manufacturing.
“A chief economist in my department estimated last year that there are 16 (potential) major oil and gas projects in the west, altogether amounting to approximately $50 billion in investment and most likely over 10,000 jobs, could be created,” he said.
“Clearly the Australian people voted to develop our country and develop areas like the Galilee basin (Queensland). It just amuses me how our financial sector is so far out of step with mainstream Australians.
“The election showed there is this “high vis” army out there—a bunch of people willing to vote in support of the resources sector and your best political asset is your workforce,” Canavan added.
Describing himself as “very passionate” to see projects such as the Woodside-led Browse and Scarborough developments come to fruition in north western Australia within the next year, Canavan said it was also critical that onshore drilling and exploration bans in New South Wales and Victoria were lifted as soon as possible.
“The solution to the issue we still face in the east is the development of new oil and gas supplies; the development of the (Santos) Narrabri Project and in Victoria conventional gas and that is what we will be pushing strongly for.”
While Narrabri had the potential to supply half of New South Wales’ gas needs, in neighboring Victoria the moratorium on conventional gas exploration and drilling was due to come up for review next year.
“If there is any common sense left in this debate, the Victorian Government will not extend that moratorium,” he said.
“If they do extend the moratorium on conventional gas, safely developed for 100 yeas in Australia…well all the blame for any further manufacturing closures because of high gas prices should be due to that government who is progressing nonsense and not common sense in our policy.”
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