B.C. Natural Gas Development Minister Rich Coleman says other players remain committed, even if their projects aren’t as advanced, but warns that B.C.’s window of opportunity will close in the next five to seven years.
While some LNG proponents have urged the B.C. government to speed up its timetable for finalizing tax rules, Mr. Coleman is confident that tabling legislation this fall for the LNG tax regime will provide enough detail for projects to make their plans accordingly. “The LNG proponents want to know that they have a stable marketplace where they can nail down their numbers for the long term and compete worldwide on the investment they want to make,” he says.
But for now, global LNG players have headed straight for Australia while Canada remains on the back burner.
Located about an hour’s flight north of Brisbane, Gladstone is no stranger to industry: It has been shipping goods to Asia for more than century.
Today, Gladstone has a population just over 62,000 and exports bauxite, aluminum and grain. For visitors, the first sign Gladstone is going through an energy rush comes at the airport. The lone baggage carousel is dwarfed by large advertisements for workers’ compensation lawyers and scaffolding firms.
On Goondoon Street, the main drag, there are other signs that this is more than just a sleepy town.
There are the large, gleaming, cheerily staffed community outreach centres with displays, pamphlets and maps that seek to soothe the community’s nerves. Stretched out along the small strip, there are separate buildings for the Santos-led Gladstone LNG venture, Australia Pacific LNG, BG Group-led Queensland Curtis LNG and another one for Shell.
The centres explain how LNG is better for the environment than other fossil fuels, show the safe double hulls of the LNG carriers and explain the fracking-style drilling that happens further inland. Hydraulic fracturing has created unease among Australia’s cattle farmers, who fear their wells will be soiled by natural gas.
Almost everyone walking the streets, sitting in the restaurants or driving Toyota Hilux pickup trucks wears yellow fluorescent clothing. This is the “fluoro army” building Gladstone’s LNG industry, a smattering of the 13,000 people who work on Curtis Island. Thousands go back and forth on huge ferries every morning and afternoon. They are so ubiquitous they even made an appearance as “high-vis zombies” in a musical performed by the waterside. “It was called Boomtown,” says Shane McLeod, a local real estate agent.
In the Santos building, marine and stakeholder manager Garry Scanlon leans over a diorama of the harbour and describes the effort that goes into building three separate LNG export terminals, all in the same place, all at the same time. The Gladstone port, which is already a big hub for coal exports, used to see on average 10,000 small ship movements within the harbour each year, he says. With each company now operating separate ferries and large vessels to move enormous LNG equipment prefabricated in Indonesia and the Philippines, that number has soared to 32,000 ship movements per month. “It’s something you won’t see again,” he says.
The pace of development is so great the city has even attracted a foreign anthropologist who studies boomtowns.
“I’m interested in local responses to accelerated change,” says Thomas Eriksen of the University of Oslo. “There’s an upside and downside to everything.”
Australia’s head start
Gladstone, as impressive as its three LNG terminals seem in comparison with Canada, is just one part of Australia’s broader LNG industry.
Elsewhere in the country, Australia already has three functioning LNG terminals. Including Gladstone’s projects, there are a total of seven projects under construction, some of which could start shipping LNG in late 2014 or in 2015.
Several projects either under construction or proposed are located thousands of kilometres away in Western Australia. Darwin in the country’s Northern Territory is another busy LNG site. These projects range from traditional offshore sites to the innovative “floating” LNG terminal being built by Shell. The gargantuan Gorgon project off the western coast is now estimated to cost a whopping $54-billion (U.S.).