Essay by Eric Worrall
I wonder if prices will go up if Australia switches from drilling for our own gas to buying gas through Twiggy’s import terminal?
Australia’s first LNG import terminal nears completion amid deadlock with energy companies
ABC Illawarra / By Tim Fernandez and Justin Huntsdale
Posted Sat 13 Apr 2024 at 6:30amSaturday 13 Apr 2024 at 6:30am, updated Sat 13 Apr 2024 at 6:58am
- In short: The first LNG import terminal in Australia is nearing completion at Port Kembla, near Wollongong.
- Squadron Energy says the gas brought in will be enough to supply most of the needs of NSW and Victoria.
- What’s next? Squadron is negotiating to secure supply contracts with energy companies.
Australia’s first liquefied natural gas (LNG) import terminal is almost built, but it remains unclear who will be buying its gas.
…
The Twiggy Forrest-backed company claims the gas imported can supply almost all of Victoria’s forecast gas needs and 70 per cent of the requirements of New South Wales.
“I don’t think we could be at a better time in the market than right where we are,” said Squadron Energy CEO Rob Wheals.
“The facility is now 90 per cent complete and the market is facing critical gas shortages over the next couple of years.”
…
AEMO said the east coast could see shortages as soon as next year if there is a particularly cold winter causing a spike in peak demand.
…
Read more: https://www.abc.net.au/news/2024-04-13/australias-first-gas-terminal-nears-completion/103701306
Obviously fracking Australia’s substantial shale gas fields or setting up coalfield gas projects would have eliminated the need to build a gas import terminal, but Andrew “Twiggy” Forest has long been a critic of domestic Australian fossil fuel production, and has repeatedly helped to convince politicians to block domestic energy projects.
“If they don’t believe the science, they can fuck off:” Forrest backs coal and gas ban
Sophie Vorrath
Feb 15, 2023Iron ore billionaire Andrew Forrest has called on leaders of all political stripes to get serious about climate action, or get out of the way, in a feisty exchange over the Greens’ new bid to block new fossil fuel projects in Australia.
…
In the mainstream media, the general hot take is that this move has essentially put a bomb under Labor’s entire carbon reduction mechanism plan, in a classic example of letting the perfect get in the way of the good.
Does Twiggy agree?
In a word, no.
“People who do not understand the grave risk of climate change should not be in any position of influence,” Forrest said.
“We’re on a climate edge here, and I want every legislator, not just in the Greens, not just in Labor, not just in Liberal or in the [Nationals], every legislator in the world to bring themselves up to speed with the science.
“If they don’t believe the science then they can just fuck off. Right? They should be nowhere near having any responsibility, whatsoever,” he said.
“Every legislator in the world should bring themselves up to speed on the science and act accordingly.”
…
Read more: https://reneweconomy.com.au/if-they-dont-believe-the-science-they-can-fuck-off-forrest-backs-coal-and-gas-ban/
This new gas import terminal comes just in time for all that extra gas drilling and export capacity Abu Dhabi announced at the last climate conference.
I’m sure Twiggy had our best interests at heart, when he campaigned to shut down domestic energy production while building a new import terminal.
After all, it would be a shame if all that additional capacity Abu Dhabi announced at the last climate conference was duplicated by new capacity in Australia.
Doubling up on capacity would create the risk of oversupply and a global fossil fuel energy price drop, which could in turn reduce household bills and delay the green energy transition.
We should all really thank Twiggy for ensuring energy continuity, by providing a gas import terminal just when supplies are getting tight thanks to all the domestic energy projects regulators have vetoed in recent years.
Pretty much laying down the gauntlet – In your face hypocrisy! “What are you gonna do about it?
I’m not making any predictions how this will play out, it could play out exactly how Twiggy wants it to play out. Twiggy is remarkably persuasive when it comes to influencing socialist and green politicians.
If he succeeds in becoming a major gas importer, my crystal ball tells me he’ll use the profits as a springboard to move on to bigger and better, maybe attempt to apply the same strategies to the US market.
Come again?
Science isn’t about belief.
Good science shows results that are obvious to anyone who looks into it carefully.
Climate “science” isn’t that so far.
Good science also does not adjust data, like past temperatures, to fit their models.
We do not have “climate science.” We have climatology, which is first cousin to astrology.
Andrew “Twiggy” Forest: just one more rich hypocrite for the “Greenies” to admire and blindly follow.
And he dares to mention “ the grave risk of climate change” . . . what utter BS!
Oh well.
Sounds like he’s pretty confidant that the Australian media will continue to carry water for the Left and won’t call him out on his hypocrisy. Just like the US of A!
A conclusion I’ve just reached is that the Peter Principle and the Precautionary Principle are inextricably joined.
That is, when people rise to their level of incompetence (Peter Principle), the only decision lever they can think to pull is to over-react or under-react to every situation (Precautionary Principle).
Twiggy has also worked out this linkage of Principles permeating the corridors of governments and their bureaucracies, and has correctly seen it as an ideal opportunity for an entrepreneur such as himself.
In that sense, he is a brilliant socialist capitalist.
“I wonder if prices will go up if Australia switches from drilling for our own gas”
There is no risk of that happening. We export two thirds of what we produce, and production (and exports) just goes up and up:
I don’t knopw what the talk of import terminals is about. Presumably for a time when we have exported whatever we have. There is talk of another at Hastings in Victoria. It is within a few km of the main gas pipeline to Melbourne, which now is working extra hard the pump from the near exhausted Bass Strait field on the Queensland for export. So maybe we will be importing before too long.
G’day Nick.
Any idea what the differentials in costs might be between the exported gas and the imported gas?
Not a trick question matey.
(But don’t regard this as any kind of a precedent 🙂 )
The actual cost difference is huge. There are good profit in exporting the gas from Australia. The price will be roughly the same because the internal prices are set by the global market.
So you need to distinguish between cost and price.
Once gas is on the high seas it can go anywhere. So to import we’d have to pay about the same as others pay to import from us.
The further you have to transport anything, the more you are going to have to pay for it. I’m not surprised you didn’t know this.
I’m not sure that this applies to all countries from which Australia imports natural gas (I’m almost certain it does not apply to LNG coming from the US), but here is the general rule for duty and general sales tax goods and materials imported by Australia:
“Here’s a handy method for quickly estimating your Australian Import Taxes. Please note that this information is current as at 15 March 2023 (see here), and may vary depending on your individual circumstances.
To determine your Australian import taxes you will need to:
Convert the value of your purchase from the respective currency to AUD.
To calculate customs duty, calculate 5 percent of the value of your goods.
To calculate your GST liability, add the value of your purchase (in AUD) to the freight and insurance costs (in AUD) and calculate 10% of that total amount.
Add the customs duties and GST liability together.
It is recommended that you engage a licensed customs agent to lodge the customs entry on your behalf, as they can provide advice on any possible available TCOs (tariff concessions) and available free trade agreements that may be applicable to your goods.”
— source of above quoted text: https://www.shipbob.com/au/blog/import-taxes-australia/
Bottom line: the unit value of what goes out from Australia is probably NOT the same as the unit value of the same thing coming into Australia, based on full accounting.
The linked ABC report quotes the CEO of the Twiggy Forrest-backed company: “Global LNG market dynamics are such that imported LNG is becoming a much more competitive alternative to domestic gas”, I have no idea what that means unless he is referring obliquely to green zealotry hampering the future development of Australia’s abundant gas reserves.
Most of the gas is produced in the North West Shelf (66%) or the Bowen Basin (26%) – total 92%.
Bowen is 1200 miles from Sydney, the North West Shelf is 3000 miles from Sydney.
The shortages in Sydney and Melbourne (even further away) are being caused by regulatory hostility towards gas production in the states of New South Wales and Victoria. Victoria even wrote a ban on fracking into the state constitution.
The obvious solution is to relax restrictions on gas production near Australia’s major population centers, or build a few extra coal plants. But energy policy in Australia has not been rational for a long time.
Victoria is a big gas producer (Bass Strait). Much of hat gas now goes through the pipes to Sydney, then up the pipeline that was built to supply Sydney from Moomba, and then on to the export terminals in Qld (not far from you).
New fields have been developed recently in the Victorian Otway basin.
Nevertheless they are facing shortages.
https://www.abc.net.au/news/2024-03-21/nsw-and-victoria-states-facing-gas-shortages-aemo/103612004
Face it Nick, your fellow travellers have scr*wed up the energy supply, and now the people are going to pay the price for their poor voting choices.
That says Vic may have shortages from 2028. That is because of poor voting choices that allowed the Bass Strait field to be drained for export to China.
But Australia will still be a huge exporter in 2028. And “shortage” just means gas flow in the pipeline currently taking gas out of Victoria will be reversed.
No, you’re ignoring that NSW is also suffering shortages, or will shortly do so. And Queensland under the giggling idiot has just announced a commitment to shutting down coal on an accelerated time table.
It’s entirely artificial, caused by regulatory failure to support fracking in NSW and Victoria. Deny as much as you want Nick, we’ll see who’s left standing when the lights go out.
Fracking is banned in the Victorian constitution. It’s mind-boggling because a constitution is no place for clauses like that, but it means that most of Victoria’s gas cannot be accessed economically, until the state constitution is changed – which doesn’t appear to be likely any time soon.
Victoria is at the same time one of the coldest Aussie states and one of the greenest, most left wing Aussie states. The last time a genuine conservative won power in Victoria was Jeff Kennett between 1992 – 1999. He was voted in because the Victorian government made such a mess of the state economy, they bankrupted the State Bank of Victoria and destroyed an entire labor union – which was too much even for the lefty voters of Victoria.
The incompetent Joan Kirner administration which wrecked the state economy made a rock video (for real), so I guess that makes it OK.
My parents brought us to Canada because they said Aus was too left wing and would get worse. Banning fraking is just about as bad as it gets, Quebec has also done that, as it is not based on any supportable science and is just about some odd green ideology.
Victorian Labor politicians have a long history of screwing up the state’s options for plentiful electricity supply.
Back in the 1990s they got the whole high country Gippsland-flowing rivers catchment area locked away as national parks land, thereby removing Victoria’s best hydro electricity opportunity for all future generations.
Bet they wished they hadn’t done all that high-fiving and back-slapping now.
VictorianLabor politicians have a long history of screwing upthe state’soptions for plentiful electricity supply.More to the point
LaborpPoliticians have a long history of screwing upthe state’soptions for plentiful electricity supply.“Moomba” – as in Gidgealpa?
Brought in in the mid 1960’s. How much more can be extracted?
Bass Str gas doesn’t go up the pipelines to Qld. For export . They have their gas fields nearby which is why the export terminals are where they are at Gladstone.
The operator of Bass Str ExxonMobil says they will halve the number of producing wellheads in the next 18 months.
Coal natural gas and uranium ore are major export earners but are restricted or banned for local use, it’s about warm fuzzy feelings rather than reason.
Plenty of gas out Narrabri way, if the greenie tape can be cut.
Looked it up and posted below. The current AUS 2P (proven and probable at current prices) natgas reserves are 60.5 Tcf. A lot. No AUS LNG imports needed for the foreseeable future. LNG exporter for a good while into the future, not a likely near future importer.
There is one remotely sensible possibility. The LNG production is now in West Australia, the consumption is in East Australia. So east Australia import of West Australia LNG might be economic compared to a new natgas pipeline across the entire country—but I doubt it given longer US natgas pipelines. Australia is 4000 km west to east. The longest US natgas pipeline, Transco, is over 13000km in total (including delivery branches). From Texas across the entire southeast then northeast up to New England.
Any such pipeline would come under attack from green crazies, Australia has its fair share. Unfortunately a hard lesson in energy reality now seems inevitable.
There is already a far more extensive pipeline network in Australia which seems to have no trouble.
Fair point. More likely the economics don’t work, the profitability of such a pipeline would be contingent on politicians being stupid, which while normally a reliable bet, probably isn’t quite reliable enough. Any development of local resources would kill the profitability of the pipeline, but an import terminal which could be reversed to an expert terminal would still remain profitable.
There is no point in building a pipeline when the East coast network is exporting 22 Mtons a year.
Nevertheless they are facing near term shortages. We’ll see how that plays out in the next few years.
The Narrabri coal seam gas is earmarked for NSW consumption only, not export.
So yes, a pipeline would be needed.
But you were probably well aware of the, and are just being a disingenuous prat, as usual.
The profitability of an export terminal owned by a crony capitalist to that crony and his crony politicians far outweighs the lower potential profitability of a pipeline built by a non-crony, thus less money to the crony politicians.
The import import terminal, probably built to work both ways with minor modifications, gives the crony “businessman” plenty of options to make money, with the help of his crony politicians.
He can use the export capability to send tankers to the other areas of Aus that need more NG.
New England in the US is importing NG from Russia because NY is blocking new NG pipelines.
I was wondering about the term “Gas Import Terminal”. Why would someone build a terminal that is only good for imports?
Sounds hinkey.
see comment
https://wattsupwiththat.com/2024/04/16/aussie-anti-fossil-fuel-green-billionaire-andrew-twiggy-forest-is-building-a-gas-import-terminal/#comment-3897534
Total production is about 2/3 in WA. But the big Eastern pipeline network not only covers local consumption, but is also drained by the big export terminals near Gladstone in Qld. In 2023 Those exported 23 Mt LNG, out of an Australian total export of 81 Mt. The Qld exports were up by 14% on 2022.
Yet NSW and Victoria are still on the brink of shortages.
Go on Nick, I know you want to say it 🙂
And it is in LONG term contracts. The chances of reducing exports to keep it in Oz are highly unlikely.
They probably wish to maintain profits of external sales while preparing for the coming COLD that Globull Worming will bring about
Just to clarify Twiggy’s version of his green mantra that everyone must
“follow the science”
His personal interpretation, based upon what he does rather than what he publicly espouses is –
“FOLLOW THE (TAXPAYERS) MONEY”
An AUS LNG import terminal does not make sense. Something else is going on if true.
As of last year, Australia was the world’s largest LNG exporter—81.2 million mt, more than Qatar. And its 2P natgas reserves were estimated last year to be 60.5 Tcf—not going to run down production in the foreseeable future.
Rud,
If I recall, at the time that the major drilling permits and exporting licenses were granted many years ago, AU’s domestic needs were adequately covered.
So long-term, locked-in export contracts were entered into.
Meantime in the intervening years, the Labor government in Victoria banned all new gas exploration and also prohibited fracking, and of course as coal fired plants were then deliberately and senselessly shot down, AU’s domestic gas needs increased considerably.
Who could have ever considered such an eventuality?
“An AUS LNG import terminal does not make sense. Something else is going on if true.”
Indeed so. I suspect it will turn out that the terminal can be modified to export.
That part of Australia has been forecast to suffer imminent shortages, due to local regulatory opposition to gas production. There are sufficient reserves to support an export industry, if regulators get out of the way of energy development.
The big production and exporting is in/from Western Australia.The big usage and importing is in/into Eastern Australia. Twiggy’s terminal in the east might be used to import gas from the west. Obviously he has a vested interest in preventing gas production in the east.
An import terminal consists of storage and relatively low tech heat exchange to vaporize the LNG into the pipeline. Whereas export terminals are a much different animal, requiring high compression horsepower, and low temperature, high tech refrigeration processes to liquify the incoming gas. It’s like comparing a household furnace to an air liquefaction plant, so not likely going to be considered a “modification” by anyone.
Same reason US gulf coast exports gas and New England and Maryland import via terminals.
But here Gladstone and Wollongong are connected by perfectly adequate pipeline (via Moomba).
Have you checked to see which way the pumps are facing? Pipeline diameters etc?
California and Australia pretty hard to tell them apart. Both have plenty of natural resources that could provide lots of reliable energy at a reasonable cost, Yet both choose to line the pockets of billionaires and politicians by importing expensive energy sources. I just don’t get it. Wake up California and Australia you are being screwed big time. You have no one to blame but yourselves.
The difference between Australia and California is that the citizens in the latter can migrate to a State that is not leading the UN agenda. There is no such option in Australia. All States and the Federal Government are now leading the UN agenda.
I am banking on NSW hitting the wall on electricity generation first – a power station outage would force it into rationing power. But then Victoria is broke so options are closing. Dan has left the sinking ship.
But Twiggy,…….Fuzzy Panda sez burning less FF means less aerosols….which means more warming….a paradox, no? You lose again Twiggy.
“I wonder if prices will go up if Australia switches from drilling for our own gas to buying gas through Twiggy’s import terminal?”
I’m reminded of that train mogul (I forget his name.) here in the US that opposed the Keystone Pipeline. He claimed his opposition was to “Save the Planet” but it was really because it would have cut into railroad profits from transporting oil via rail.
Warren Buffet of Berkshire Hathaway, who bought BNSF because he always wanted a train set as a boy. And yes, the Athabascan Tar Sands oil is transported by BNSF rail to Texas refineries because the Keystone XL pipeline was nixed by Biden on climate grounds. What Biden really did was cause Canada to complete a second western trans mountain pipeline so the oil now goes mostly to Asia rather than US.
lBiden did nothing for the climate. As Obama said, ‘Never underestimate Joe’s ability to eff things up.’
Biden and Trudeau – what a match made in
heavenHades.Hopefully, by the end of next year, the gods reigning over North America will conclude that the punishment of the general citizenry there on account of the Sodom & Gomorrah policies inflicted by the current governments can be lifted.
Ol’ Warren had a train set as a boy….and still has it….he also delivered the Washington Post as a boy and later bought the whole paper…..he used to rent a jet for travel and bought the whole company.
Texas refineries can’t handle Albertas heavy crude. I see it’s going west to Portland and then to Asia for refining
they aren’t happy in Portland
Yes the Texas refineries CAN.
Then what is Warren Buffet transporting by rail to Texas?
Don’t forget that Obama nixed the pipeline FIRST.
Because of the insanity of US laws, TRUMP could not get it going fast enough to get it completed before Brandon got in office. Joe stopped it again on his FIRST day in office.
And the oil from Canada is HEAVY and perfect for diesel and heating oil. The refineries in Texas are set up to process that heavy oil.
I remember when “Twiggy” was a world famous model … of fashion.
It sounds like, to this US observer, he’s only a model of self-serving hypocrisy.
C’mon man!
Twiggy’s company Fortescue Metals is one of the largest iron ore miners and exporters in the world.
You can’t get any more environmentally friendly activity that digging up tens of millions of tons of iron ore every year.
I’m shocked, shocked I tell you to hear that some folks think he’s a model of self-serving hypocrisy.
Not a good idea to use sarcasm, as in “I’m sure Twiggy had our best interests at heart, when he campaigned to shut down domestic energy production while building a new import terminal.“. Some people (not regular WUWTers though) won’t be able to tell.
I’m hoping the bit about the dangers of reducing domestic energy prices is enough of a hint 🙂
Being deep pocketed green means you can do the BS climate bandwagon and then leverage it for cash…oppose indigenous hydrocarbon production and then build and LNG port. Makes perfect sense.
This is not good news for Australian energy consumers who are caught in the middle.
The world needs to frack on, it’s almost always cheapest energy input.
We have other deep pocketed greens with the same sort of megalomaniacal ethics…such a becoming the largest farmland owner, taking the land out of production and the investing in building a fake meat industry. Who pays for that? In this case, the likely victims are the people of the cities Northern California to Seattle….somehow fake meat will fly there. It better fly because beef from the Northwest will be in short supply. This isn’t about carbon it’s about dough!