QCLNG Has Not Sold Spot Since March: Shell
The Queensland Curtis LNG facility (QCLNG) on the east coast of Australia hasn’t sold a spot cargo of LNG since March this year, Shell Australia’s chairwoman Zoe Zujnovich said October 9.
“All volumes in excess of the contracted levels at QCLNG have been sold in Australia to local customers,” she said.
“The company has continued to divert gas into the local market, and since the meeting with the Prime Minister in March this year has not sold a single LNG cargo on the spot market,” she said at the AFR National Energy Summit in Sydney. Long-term LNG exports though had been maintained.
Heads of QCLNG, as well as other east coast LNG exporters such as Australia Pacific LNG and Gladstone LNG, met with Prime Minister Malcolm Turnbull in March and in subsequent meetings to discuss concerns that the east coast of Australia could face a gas shortage in the coming years. The LNG operators have largely been blamed for causing the shortage crisis, but Jujnovich defended their actions.
“Blaming the LNG industry alone for recent issues with the supply and price of gas is in itself a selective and intentionally misleading reading of the gas market,” she said, adding that Australia's east coast gas crises threaten LNG operations.
“Unless the Australian people have access to a reliable and affordable supply of gas, there will be no social licence for an LNG export industry,” she said.
“At Shell we understand that unless we are seen as a force for good we won’t have continued support from the resource holder – or the Australian government on behalf of the Australian people,” she added.
She also challenged the often-quoted assumption that foreign customers are paying less for Australian gas than Australians themselves.
“This assertion ignores the basic truth that no successful business anywhere in the world has flourished by ignoring a large percentage of its potential customers base,” she said.
“Allow me to be absolutely clear on this point – Australian gas is never cheaper for manufacturers in Japan than it is for Australian factories,” she said.
She said comparisons between the price paid by Japanese utilities with long term contracts to those paid by local manufacturers is simplistic and misleading.
“Ignoring the fact the Japanese utility could buy fifty times greater volumes than the largest of Australia’s manufacturers, this price does not include the costs passed on to similar sized manufacturing customers in Japan – the figure that would give us a like for like comparison,” she said.
Nathan Richardson