Demand for gas at Curtis Island's LNG plant puts pressure on

CURTIS Island's liquefied natural gas plants' growing demand for gas is forecast to increase the cost of gas for Gladstone's industrial users, a further burden to one refinery that has been feeling the pinch before the LNG plants started exporting.

Northern Oil Refinery uses 600-700 gigajoules of gas a day, at costs of $11.5 per gigajoule, double what Southern Oil Refinery pay in Wagga Wagga.

Southern opened its Northern refinery in Gladstone on March 2014 and Gladstone has not given Northern the competitive advantage managing director Tim Rose thought it would.

He said gas suppliers weren't interested in supplying his refinery and were only interested in the LNG plants.

"We literally had to beg (gas suppliers) to give us a quote," he said.

"Gas prices are a real impediment on business in Queensland."

Queensland minister for state development Dr Anthony Lynham said Queensland, and Gladstone, was still a competitive place to do business with the lowest payroll tax rate in the country.

"We know that energy supplies are integral to industry growth and job creation"

Dr Lynham said he was developing a plan to maximise exploration and development that "may assist in moderating gas prices". Government regulation was one hurdle Australian Competition and Consumer Commission chairman Rod Sims said was impacting the supply of gas and future security of domestic supply.

At the Sydney Oil and Gas Industry Outlook last week he said Australian reserves would be needed to meet demand by 2019.

But with low international gas prices, he said it may not be commercially viable to tap into those reserves.



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