OPEN LETTER: Analyst defends damning LNG future predictions

RECENTLY, the Institute for Energy Economics and Financial Analysis released a report on the three LNG plants at Gladstone.

It stated that it was likely that some of the LNG trains at Gladstone would shut within the next two years.

The report was detailed in its analysis of global gas markets.

The inescapable conclusion is that global gas markets are over-supplied by a wide margin for the long-term.

The LNG industry at Gladstone has done itself no favours.

It was incapable of controlling its costs when it built the three plants on Curtis Island and it did not ensure that it had sufficient gas before proceeding.

The gas resources that it has developed have been at a far higher cost than their initial projections.

The result is that the plants at Gladstone sit right at the top of the global cost curve.

Put simply, they had not done the work necessary to ensure success and their costs are too high.

After any resources boom the high cost producers are the ones that exit the industry first.

The oil and gas industry has been strident in its criticism of IEEFA, however they have failed to address any of the key issues raised in the report.

The people of Gladstone deserve better.

Gladstone must plan for a future with lower LNG production at Curtis Island.

To not do so is to ignore the inevitable.

 

Bruce Robertson, Institute for Energy

Economics and Financial Analysis



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