07 AUGUST 2013www.theajmonline.com.au
Despite growth in Australia’s LNG sector, aluminium producers facing limited supply
Edited by : AL CIRCLE
2 min read
Australia’s liquid natural gas production is growing fast, and is set to continue. But one of Australia’s biggest gas consuming sectors says it’s suffering from a stifled local market.
Miles Prosser, executive director at the Australian Aluminium Council, says despite the immense growth in Australia’s LNG production, local gas buyers, such as alumina and aluminium producers, are the victims of “a thin and shallow market.”
A recent government report estimated a 26% rise in LNG exports in the 2012/13 financial year, resulting in a market worth around $15.2bn.
And Wayne Calder, deputy executive director of the Bureau of Resource and Energy Economics, said last Friday that the rapid evolution of the global energy market would be key to Australia’s LNG production growth.
“Gas is becoming an increasingly important part of the energy supply for many countries and is forecast to grow rapidly into the future,” Calder said.
But despite a promising future, underpinned by over $200bn-worth of proposed LNG developments, local buyers of gas are still dealing with a limited domestic market, Prosser explains.
“Claims that there is plenty of gas available and that the market will find a solution are simply wishful thinking when domestic users struggle to find suppliers in a thin and shallow market,” Prosser says.
Australia’s alumina and aluminium sectors, which Prosser’s council represents, use over 140 petajoules of gas annually. To put that in perspective, Australia produced 2270 petajoules of gas in the 2011-12 financial year.
Despite this usage, Prosser says, “The absence of a deep and efficient gas market makes it extremely difficult for domestic industry to secure long-term gas contracts, which is stifling investment decisions.
“The situation needs to change if policy makers want viable domestic manufacturing to remain a significant contributor to the national economy.
“Impacts on gas users are not being addressed by the market.”
According to the Australian Aluminium Council, the alumina and aluminium sectors employ more than 15,000 workers nationally, particularly in regional Australia and the industry’s combined export earnings total roughly $10bn.
Miles Prosser, executive director at the Australian Aluminium Council, says despite the immense growth in Australia’s LNG production, local gas buyers, such as alumina and aluminium producers, are the victims of “a thin and shallow market.”
A recent government report estimated a 26% rise in LNG exports in the 2012/13 financial year, resulting in a market worth around $15.2bn.
And Wayne Calder, deputy executive director of the Bureau of Resource and Energy Economics, said last Friday that the rapid evolution of the global energy market would be key to Australia’s LNG production growth.
“Gas is becoming an increasingly important part of the energy supply for many countries and is forecast to grow rapidly into the future,” Calder said.
But despite a promising future, underpinned by over $200bn-worth of proposed LNG developments, local buyers of gas are still dealing with a limited domestic market, Prosser explains.
“Claims that there is plenty of gas available and that the market will find a solution are simply wishful thinking when domestic users struggle to find suppliers in a thin and shallow market,” Prosser says.
Australia’s alumina and aluminium sectors, which Prosser’s council represents, use over 140 petajoules of gas annually. To put that in perspective, Australia produced 2270 petajoules of gas in the 2011-12 financial year.
Despite this usage, Prosser says, “The absence of a deep and efficient gas market makes it extremely difficult for domestic industry to secure long-term gas contracts, which is stifling investment decisions.
“The situation needs to change if policy makers want viable domestic manufacturing to remain a significant contributor to the national economy.
“Impacts on gas users are not being addressed by the market.”
According to the Australian Aluminium Council, the alumina and aluminium sectors employ more than 15,000 workers nationally, particularly in regional Australia and the industry’s combined export earnings total roughly $10bn.
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