Gas producer Senex, which is jointly owned by South Korean steel giant Posco and Australian billionaire Gina Rinehart, has planned a more than $1 billion expansion of its Queensland gas fields with the largest some of the extra fuel apparently intended for domestic use.
The company, which is seeking federal and state approval for two sites adjacent to its Atlas and Roma North projects in the Surat Basin, made the announcement ahead of a speech by Resources Minister Madeleine King. It still has to clear some state regulatory hurdles, Senex said.
If it goes ahead, the investment would triple Senex’s annual production from about 20 PJ of gas in 2021 to 60 PJ, a spokesman said. Senex’s current production is split roughly equally between export and domestic, but “the vast majority of additional production will be diverted” to local customers, they said.
The company, which took over last December and delisted from the ASX in April, said the recent energy crisis in eastern Australia highlighted the need for more supply .
“The recent electricity crisis demonstrated that natural gas is critical to providing safe and reliable energy to Australians and is needed to support renewables and replace aging coal-fired generation,” Senex CEO Ian Davies said. . Without additional gas, “electricity costs will go up even more,” he said.
Two-thirds of the planned investment would be spent over the next two years, creating more than 200 jobs during construction and another 50 permanent jobs, the company said.
“We look forward to continuing to work in partnership with the Australian and Queensland governments to finalize the necessary regulatory approvals for this investment and deliver more gas to the market as soon as possible,” Davies said.
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The announcement comes after a report released by the Australian Competition and Consumer Commission last week warned of a potential shortfall of 56 PJ of gas next year unless LNG exports save some of the non-contracted gas for local use. Gas availability and rising energy prices will be the focus of energy ministers’ meeting in Canberra on Friday.
The Australian Petroleum Exploration and Production Association (Appea), the peak body for the gas industry, welcomed Senex’s investment. “This is a massive investment to help secure Australia’s energy future and ensure local natural gas continues to flow to manufacturers, homes and businesses,” said Acting Appea CEO Damian Dwyer.
Senex said it had signed long-term deals for 90PJ, including 43PJ in the past 12 months. Local customers include Visy, CSR, Orora, Adbri, Southern Oil Refining and CleanCo, and it supplies gas to GLNG for export.
Resources Minister King said “more supply from more sources and more advocates, more sellers … is certainly part of the solution.”
“Making more gas available to more people is important to ending this projected shortage,” he said. “I am therefore fully in favor of Senex’s announcement today.”
King said he had “every confidence” the company would follow the rules needed to get approval from Environment Minister Tanya Plibersek. The previous owner of the two expansion sites, APLNG, had secured environmental approvals for the area, and Senex is seeking to have their approval extended, the company said.
The expansion plan will also need to be approved by the Queensland Department of Environment and meet the conditions set out in the Regional Planning and Science Interest Act.
“Queensland continues to do the heavy lifting for national gas to ensure energy security,” Resources Minister Scott Stewart said. “Any resource project must accrue environmentally, socially and financially.”
Greens mining and resources spokeswoman Dorinda Cox said the government was on the wrong track by creating a vision for Australia’s future resources industry that was underpinned by coal and gas.
“It should focus on investing in green resources and creating a clean energy export industry, including fuels generated from renewable energy like green hydrogen,” Cox said.