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"Firing on all cylinders": the dynamic LNG industry. Speech to open the 12th LNG International Conference, Perth, 4 May 1998

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"Firing on all Cylinders" : The Dynamic LNG Industry


Speech by the Australian Deputy Prime Minister and Minister for Trade, The Hon Tim Fischer to open the 12th LNG International Conference, Perth, 4 May 1998.




Thank you Grant King for the introduction.


David Agostini (Chairman, LNG 12 National Organising Committee), Claude Détourné, (Chairman, LNG 12 Steering Committee), Hiroshi Watanabe (Chairman, Tokyo Gas Co), Minister Al-Attiyah (Minister of Energy and Industry, Qatar), John Akehurst (Woodside). My Federal colleague, Warwick Parer (Minister for Resources and Energy). Distinguished Guests. Ladies and Gentlemen.


I am delighted to be in Perth, and to have the opportunity to open the 12th International Conference on Liquified Natural Gas (LNG 12). I have two objectives this morning.


First, I want to extend a very warm welcome to all our guests from overseas, particularly if this is your first visit to Australia. You have alighted upon a great Australian metropolis - Perth, on the shining Swan River - a city known for its beauty and hospitality.


Australia is a young country by the standards of many nations in Europe, Asia and the Middle East - but it is also a country very much `on the move', looking outward for new opportunities and a better future. Australia is a unique and enthusiastic member of the Asia Pacific region - our population is made up of people from over 130 countries, and we have ever-deepening ties with Asia and the Indian Ocean region, as well as our strong European heritage and extensive links to North America.


You will find in Perth, and across Western Australia, a strong entrepreneurial spirit, and a dynamic commitment to industry and enterprise. As Federal Minister for Trade, I am especially proud to report that WA is Australia's premier export state. With only just under 10 percent of the country's population, WA's exports last year amounted to about one quarter of Australia's total exports. WA is a market leader in many commodities. Its production of LNG accounts for about 10 percent of the total world trade, and the LNG industry in WA is set to boom. There could not be a more appropriate location for this global LNG industry gathering at this time.


And that leads me to my second purpose this morning - to officially welcome you to LNG 12, and speak very briefly about the importance of this impressive event, and the Australian Government's strong commitment to the LNG Industry.


LNG 12: Another First for Australia


These triennial LNG international conferences and exhibitions, the first of which was held thirty years ago, are the most prestigious world forum for the LNG industry. All the industry's `movers and shakers' are here in Perth this week.


Significantly, it is the first time that the LNG Conference and Exhibition has been held in Australia - a great honour for all Australians - and it is the largest and most important energy conference event ever held in Australia. I congratulate the international and Australian sponsors, and the National Organising Committee - with a special word of thanks to the Australian Gas Association and the North West Shelf Joint Venture Partners - and everyone else associated with the preparations for this event.


The LNG Industry


The LNG industry is of great importance to Australia - it is worth more than AUD 1.5 billion in exports per annum. It is also important to the world. Increased used of environmentally friendly LNG will reduce greenhouse gas emissions, expand trade and enable consumer countries to broaden their energy supply. The number of LNG plants in operation - as well as countries exporting and importing LNG and new projects under consideration - are increasing every year. The competition to see who will get the next `greenfield' LNG project off the ground is intense. And that should make for interesting discussion between delegates over the next four days ! The industry can only develop further as a close partnership between buyers and sellers - success requires long term relationships which lay the basis for financing new capacity and benefits for all.


North Asia is seen as the world's largest LNG market over the next twenty years, and Australia, like its competitors, is looking to supply the growing regional and global demand for LNG. India, too, presents significant market opportunities. Australia - a gain, like its competitors - is fortunate in having huge uncommitted gas reserves and close proximity to potential new markets in Asia. And - of great importance - Australia is seen across the world as a reliable and secure supplier.


Expansion plans for the North West Shelf LNG Project in Western Australia, the planned Gorgon field development - and other projects in the Northern Territory - have the capacity to expand the industry and add considerably to LNG trade worldwide, especially in the Asia Pacific. The North West Shelf Project is the largest single resource project in Australia, and represents a AUD 12 billion investment in off-shore production and onshore processing facilities. The Joint Venture Participants' expansion of facilities at Karratha will potentially double Australia's LNG production to 14.5 million tonnes by 2003.


The Government's Commitment to the LNG Industry


I want to emphasise that the Australia Government is strongly committed to the further development of the LNG industry. We are determined to maintain a policy environment which benefits world LNG trade, and encourages investment in the utilisation of LNG resources. The recent removal of controls on the export of Australian LNG is just one example of our commitment to free trade in LNG.


The Government's plan for Australian industry released last year - called Investing for Growth - laid out our broad objectives and strategies to secure sustainable economic growth. This plan included an undertaking to develop - in close consultation with industry - a far-reaching LNG Action Agenda.


My colleague, Senator Warick Parer, the Minister for Resources and Energy, is taking the initiative forward - he will be meeting with key industry representatives this afternoon to discuss the Action Ag enda. The Agenda will comprise an analysis of current industry performance, identification of impediments to growth and the development of priorities for reform. The range of issues that could be examined is wide - from marketing, taxation reform, environment and native title, to approvals processes, technology transfer and access to pipelines and facilities.


Bob Mansfield, appointed by Prime Minister Howard last year as the Government's Strategic Investment Coordinator, is also working closely with the LNG industry in encouraging further investment. This reflects the Government's commitment to making Australia a premier investment destination in the interest of promoting strong economic growth, and for the creation of long term sustainable jobs.




At the regional level, in APEC, Australia is working in three key ways to expand trade and investment in the energy sector:


• First, as part of a broader APEC initiative, energy is one of the nine sectors being `fast tracked' for freer and more open trade in APEC through the early voluntary sectoral liberalisation initiative;

• Second - in the Gas Infrastructure Initiative - a study is under way to examine ways to accelerate investment in natural gas supplies, infrastructure and trading networks in the APEC region; and

• Third, in energy security, another study is looking at how to remove impediments to the efficient operation of fuel supply markets for the power sector;


Australia is taking a lead role in all these areas of APEC activity, and we are consulti ng closely with industry as the process moves forward.


Bilaterally, too, the Government has a strong commitment to facilitate the development of LNG resources in the Timor Gap Zone of Cooperation with Indonesia - to achieve a downstream development framework that is fair, equitable and profitable for the joint venturers.


Our Wider Trade Agenda - Meeting New Challenges


Of course, the APEC and LNG Action Agendas are an integral part of the Government's wider effort to position Australia for sustained, low-inflation growth at home and expanding exports abroad. The Government's trade policies - integrated at the bilateral, regional and multilateral levels - are prizing open existing markets and finding new markets for Australian goods and services.


Like the LNG industry's long term approach to the development of resources, our trade strategy combines long term vision with practical short-medium term measures. Australia's response to the Asia Pacific's economic difficulties reflects our confidence in the long term fundamentals of the region, coupled with sharply-focused measures to support Australia's exports to the region, and assistance to help our friends and neighbours overcome obstacles to renewed growth - whether through our contribution to the three IMF packages, or well-targeted Australian aid to help alleviate the social impact of the economic crisis.


Above all, I am convinced that freer and more open trade and investment will continue to be a `win-win' situation - it will benefit Australia and our trading partners in the region and beyond.


Conclusion: Opening the Conference


Everything I have said this morning points to a bright future for the LNG Industry. It is an industry with an enthusiastic and growing commitment to innovation and new technology, as the extensive Conference program and sessions amply demonstrate.


I encourage all those attending LNG 12 to make the most of the many activities that this Conference offers, and also to see as much as possible of this extraordinary city and State including, of course, the impressive North West Shelf Gas Project.


I have great pleasure in declaring LNG 12 officially open