Shell boss blasts gas price quarrel
THE era of cheap gas is over and prices would be even higher if it weren’t for the nation’s booming export industry, the chair of Shell Australia says.
Zoe Yujnovich says it is incorrect to blame high gas prices on exports, and $200 billion invested in the local industry would not have happened without overseas customers.
“Blaming the increase in the price of gas on exports is wrong and cannot go unchallenged,” Ms Yujnovich told the Melbourne Mining Club yesterday.
“Gas exports from Queensland have unlocked the huge resource held within Queensland’s coal seams — a resource that would have stayed in the ground were it not for the economies of scale provided by the export industry.
“Without exports, $200 billion worth of investment by gas companies would never have happened.”
Shell is the nation’s biggest exporter of liquefied natural gas, operating the QGC coal seam gas project, formerly known as Queensland Gas Company, and the Prelude floating liquefied natural gas project off Western Australia.
Ms Yujnovich said the era of cheap gas for the east coast — a supply that has underpinned Victoria’s manufacturing sector — was rooted in the fact gas was traditionally a byproduct of oil production.
“The oil paid for the development costs and underpinned infrastructure overheads,” she said. But today the cheap gas is almost gone.
“New developments in Bass Strait and the Cooper (Basin) are deeper and harder to ex- tract — making them more expensive. And unlike the developments of the ’60s and ’70s, there is less oil to underpin the development costs.”
Ms Yujnovich said Shell’s Queensland gas fields produced “dry” gas with no oil.
“So the gas needs to carry 100 per cent of the costs associated with exploration, development and distribution,” she said.
Gas policy has become increasingly contentious as major manufacturers complain they cannot source affordable, long-term supplies.
“Without exports, Australia would be relying on imports, despite having huge gas resources in the ground,” Ms Yujnovich said.