Australia’s east coast LNG projects face significant head- winds owing to a gas supply shortage, a report pub- lished February 21 by consultancy EnergyQuest said. “Queensland faces the partial shut-down of a third

of its barely decade-old A$84bn ($60bn) LNG industry by the middle of next decade due to a gas supply short- age, together with diversions to the domestic market,” it said. “This would cut output to four LNG production trains from the current six trains built on Curtis Island off Gladstone by three project owners.”

The three LNG exports projects – ConocoPhillips-Origin Energy Australia Pacific LNG (APLNG), Shell’s Queensland Curtis LNG and the Santos-led Gladstone LNG – on Australia’s east coast are all in Queensland. All three rely on coalbed methane (CBM) from the Bowen and Surat Ba- sins, which are a less conventional gas source than feeds Australia’s successful west coast LNG industry.

The report’s findings show that there is now doubt if sufficient Queensland CBM will be available for the three Gladstone plants ever to achieve full-scale produc- tion. The plants operated at an average 82% capacity in 2018, it said.

A shortage is expected by 2025 and will be exacer- bated by potential political pressure for the LNG opera- tors to divert gas to the domestic market.

“The three Australian east coast projects are all suc- cessfully producing, with China the biggest market (70% of 2018 Queensland exports) followed by Korea (16%)