LNG FUKUROKUJU is purpose built to carry LNG from the APLNG facility at Curtis Island to Kansai Electric facility in Japan.
LNG FUKUROKUJU is purpose built to carry LNG from the APLNG facility at Curtis Island to Kansai Electric facility in Japan. APLNG

Worries Curtis Island LNG sites won't fulfil winter demand

WINTER is coming.

Those three words are sending shivers down the spines of more than just Game of Thrones fans now, with a leading gas analyst warning this winter will be a significant test for the three Curtis Island LNG plants.

EnergyQuest chief executive Graeme Bethune has warned QCLNG, GLNG and APLNG will struggle to fulfil their export and domestic market contracts unless they have a significant lift to production.

Mr Bethune said as winter sets in across southeast Australia, causing a sharp increase in gas demand, the domestic market could tighten.

His warning, published in EnergyQuest's latest quarterly report on the LNG market, is based on a decline in coal seam gas production.

"The winter months will be a significant test, with 60 per cent of annual domestic consumption on the east coast typically occurring between the beginning of May and the end of September, and demand from gas-fired generators rising following the closure of Hazelwood," Mr Bethune said.

The three Curtis Island plants, which continue to operate below capacity, were forced to supply more gas to the domestic market last year amid concerns of a gas shortfall this year.

They also face scrutiny by the Federal Government's Australian Domestic Gas Supply Mechanism, which can trigger export restrictions or bans if Australians need more gas.

Mr Bethune said there was a "worrying" trend of declining coal seam gas production over the past two quarters in Queensland.

"While there are many positive initiatives under way there is currently little prospect of them meeting total LNG and domestic demand."

Meanwhile the Australian Electricity Market Operator is expected to release its updated forecast for east coast gas demand and supply this month.