Monday, 26 October 2009
Tonight I would like to outline the importance of the gas industry to the future economic growth of Australia and, particularly, to the Northern Territory and my seat of Solomon. Honourable members will be aware of the Gorgon announcement that has committed $43 billion to develop a liquefied natural gas project located on Barrow Island off the West Australian coast. While it has been some 30 years in the making, this announcement is the precursor to a huge surge in investment in Australia’s natural gas resources. One of those investments was announced last year when Inpex and Total selected and announced Darwin as the site for the onshore processing plant for Ichthys gas field development in the Browse Basin. I always look forward to the regular project updates I receive by the Inpex team, including Managing Director Seiya Ito, Sean Kildare, Tim Langmead and Nigel Wilson. I acknowledge their contribution to my speech tonight.
The Australian Petroleum Production and Exploration Association are confident that Australia will be exporting up to 60 million tonnes of LNG a year by the end of the next decade. That will be a fourfold increase on current LNG exports which, according to ABARE, last year contributed more than $10 billion to Australia’s earnings from overseas. It is not hard to accept APPEA’s view that reliable, secure and competitively priced energy is crucial for Australian households, industry and the economy. Within this framework, oil and natural gas play a key role in meeting many of our energy needs. As the Minister for Resources and Energy, Hon. Martin Ferguson, said in his address to the CEDA Energy Overview earlier this month:
As the developing nations of the world—led by China and India—continue to modernise, demand for resources and energy supplies will continue to grow, providing Australia with great opportunity.
As China and India lift hundreds of millions of people out of poverty, global demand for LNG is forecast to triple by 2030. Australian gas can secure Australia’s future as a global energy superpower by enhancing energy security at home, building energy security for our trading partners, giving our neighbours a cleaner, greener fuel and driving Australia’s economic growth. In developing our LNG industry, we are giving our trading partners a transition fuel for a low-carbon economy. After all, LNG produces about half the greenhouse gas emissions of coal when used for electricity.
Considering that Australia did not begin exporting LNG until 1989, the industry has made giant strides. Australia is now the third largest LNG supplier in the Asian region and the fifth largest global supplier. The potential is to become the second largest global supplier by the end of the next decade. In my own electorate the evidence of that potential is very clear. Not only is Darwin LNG producing and regularly loading LNG tankers for Japan; we also have substantial activity associated with the development of the Ichthys project in the Browse Basin which is being considered for development by Inpex. It is true to say this will be one of the most challenging LNG developments anywhere in the world.
About nine years ago the Ichthys reservoir in the Browse Basin first demonstrated its potential. Since then, the reserves estimates have grown significantly and provide the basis for a world-class LNG development. Inpex and its partner Total are now in the front-end engineering and design phase of a project that is likely to result in more than $25 million being invested. That figure is not insignificant; it represents about two-thirds of the aggregate Japanese investment in Australia last year. And, while on the significance of Japan as our largest LNG trading partner, I am delighted to see that the hardworking Minister for Trade, Simon Crean, is currently in Japan and will address the 47th Australia-Japan Joint Business Conference. The visit is the first by an Australian minister since Japan’s historic change of government following elections earlier this year. Mr Crean will hold the inaugural trade ministers’ dialogue with his Japanese counterpart and with other senior Japanese government ministers.
The Inpex project is very important to the Northern Territory. It is expected to create some 3,000 jobs during construction and 700 during operations and it may extend more than 40 years. That, of course, makes Darwin and the NT vitally important to achieving the national objectives. And I can assure the House the people of my electorate are excited about this opportunity.