Dire warning Gladstone LNG trains to shut down in two years
A NEW report on Gladstone's liquefied natural gas industry has warned some of the six LNG trains will be shut within two years.
In a scathing analysis, the Institute for Energy Economics and Financial Analysis (IEEFA) has questioned the long-term financial liability of the three Curtis Island projects.
The IEEFA, which conducts research into issues related to the environment and energy, this morning released the report Australia's Export LNG plants at Gladstone: the risks mount.
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Author and LNG analyst Bruce Robertson cited advances in renewable energy, and cheap production from the US and Qatar and growth of the LNG industry in China as the main issues facing Gladstone's $70 billion industry.
"Some of the liquefaction trains at Gladstone will cease production altogether within two years as the expanding gas glut puts relentless downward pressure on gas prices," he said.
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"In all resource markets, the highest-cost producers have to curtail production first.
"The very best CSG fields in Australia have been already been drilled, and as a result the companies involved in LNG production on (Curtis Island) and the East Coast will continue to produce at a net loss."
The gas industry has dismissed the report's concerns over Gladstone's future.
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Industry body Australian Petroleum Production and Exploration Association questioned the motives of IEEFA, describing the company as having a "public agenda opposing fossil fuels".
"(IEEFA) is willing to use the hard working men and women of Gladstone as pawns in their efforts to destroy the only energy sourced which can provide affordable and reliable power to homes and industry, fossil fuels," Queensland APPEA director Rhys Turner said.
Shell highlighted comments made by executive vice president Steve Hill, defending the viability of its QCLNG project.
"What is different to many people's expectation is we have seen an equally strong demand growth, potentially even a more strong demand growth," Mr Hill said.
"In 2016, the market grew and easily absorbed all the new supply growth."