Australia’s eastern state of Queensland expects a “surge” in LNG exports to contribute to year-on-year economic growth of 6% in 2015-16 — an 11-year high and double the prediction for next fiscal year, state Treasurer Tim Nicholls said.
“The Queensland economy is of course in a period of transition as the investment phase of the large LNG projects nears completion and the production and export of LNG begins,” Nicholls said. “The transition is, in effect, the quantitative handbrake that constrains the headline growth rate in 2014-15.”
Nicholls, also Queenland’s trade minister, predicted state economic growth of 3% year on year in 2014-15, the highest in Australia. He made the forecasts in a 2014-15 state budget speech Tuesday.
LNG royalties accruing to the state are expected to rise from A$199 million ($184 million) in 2015-16 to A$636 million in 2017-18, Nicholls said. This compares to forecast coal royalties of A$2.1 billion next fiscal year, rising to A$3.3 billion in 2017-18.
Three LNG export projects are being built on Curtis Island, off the port of Gladstone. They will be supplied mainly by coalseam gas produced onshore Queensland.
The three projects are estimated to cost at least $60 billion and will have a combined export capacity of 25 million mt/year.
The first of the three, the two-train 8.5 million mt/year Queensland Curtis LNG project operated by BG subsidiary QGC, is due to load its first cargo later this year.
The Santos-operated 7.8 million mt/year Gladstone LNG project and Australia Pacific LNG’s 9 million mt/year facility are both expected to start in 2015.
The Australian Petroleum Production and Exploration Association welcomed Queensland’s pro-gas policy, contrasting it with that of two neighboring states.
“The Queensland government, in stark comparison to New South Wales and Victoria, continues to show strong leadership,” said Paul Fennelly, APPEA’s chief operating officer for eastern Australia. “The result is that the people of Queensland benefit from the development of a new industry.
“Ten years ago, there was barely a natural gas industry in Queensland. Today we are looking forward to Queensland’s growth rate being the highest in the country on the back of gas exports,” Fennelly added.
Nicholls announced a budget surplus of A$188 million for 2014-15.
He said that if re-elected, the state government would sell its stakes in power generation companies Stanwell and CS Energy and lease the ports of Gladstone and Townsville.
An election in Queensland is due no later than June 20, 2015, but is widely expected to be called by the end of this year.
The incumbent Liberal National Party government won a landslide victory over Labor in 2012, gaining the largest majority in the state’s history.