In 2011, Queensland gas transmission pipelines had an annual throughput of 265 petajoules (PJ). Gas distribution pipelines had an annual throughput of 18 PJ.
The DEC from gas pipelines in Queensland in 2011 was estimated to be $283 million - made up of $214 million from transmission and $69 million from distribution.
The Audit projects a rise in the DEC of gas pipeline infrastructure to $2 billion by 2031, driven by demand for LNG projects in the Gladstone region. This increase is made up of $1.7 billion from transmission and $17 million from distribution pipelines. This near nine-fold rise in DEC is in line with the state's broader economy growing by 95 per cent over the same period.
The main pipelines in Queensland are the North Queensland Gas Pipeline, Queensland Gas Pipeline (Wallumbilla to Gladstone), Carpentaria Pipeline (Ballera to Mount Isa), Berwyndale to Wallumbilla Pipeline, Roma (Wallumbilla) to Brisbane Pipeline, and South West Queensland Pipeline (Ballera to Wallumbilla).
High international demand for gas will lead to a structural shift in the Australian gas market. Australia's gas exports are predicted to increase from 56 billion cubic metres (BCM) in 2012 to 130 BCM in 2020, driven mostly by the start of a number of LNG export terminals, heavily focused in Queensland. This increase will mean that the majority of gas production is exported, and is the main driver of current gas infrastructure investment in Australia.
AEMO379 also forecast a very large rise in gas consumption in Queensland, driven by LNG export, from 252 PJ in 2014 to 1570 PJ in 2031, but a sizeable decline if LNG is excluded. Non-LNG consumption of gas in the state is forecast to fall from 211 PJ in 2011 to 145 PJ in 2031.
The unprecedented rise, driven by LNG export, masks an inconsistency between the Audit's forecast of gas infrastructure DEC, and AEMO's forecast of gas consumption. The DEC analysis was finalised before the latest AEMO gas market forecasts were published. Those forecasts were the first to show a break in what had previously been a direct link between economic growth and rising (domestic) energy consumption. Also, AEMO reports and forecasts gas consumption in petajoules, whereas DEC is a measure of the value-add provided by gas infrastructure, in dollars. The two are not necessarily perfectly correlated.
The strong demand for gas exports means that there are significant opportunities to develop both conventional and unconventional gas fields in Queensland. The Surat and Bowen basin has the largest proved and probable gas reserve in eastern Australia - around 42,000 PJ.380 Most of the reserves in the Surat and Bowen basin are coal seam gas (CSG). Further development of these reserves may require additional investment in pipeline capacity and associated works by the private sector. The location of pipelines will depend on the location of new gas supplies.
There is wide acknowledgement of an ongoing structural shift in the gas market as Australia significantly expands its ability to export gas. There is also uncertainty about whether existing gas market and regulatory frameworks are well suited to handle the shift. Within this context, the AEMC recently conducted a gas market scoping study, which recommended Australia conduct a strategic review of the gas sector, including a review of future markets and the Victorian declared wholesale gas market. The AEMC initiated a review of the design, function and roles of facilitated gas markets and gas transportation agreements on the east coast of Australia on 20 February 2015. Further recent declines in oil and LNG prices, by as much as 50 per cent, have had an impact on the profitability of LNG projects.
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379. Australian Energy Market Operator (2014b)
380. Queensland Department of Natural Resources and Mines (2014)