Incitec warns gas shortages threaten Brisbane plant

The LNG export boom may be lining the government’s coffers but it continues to threaten the future of one of Queensland’s biggest manufacturers.

GAS shortages caused by the LNG export boom continue to threaten the future of one of Queensland’s biggest manufacturers.

Incitec Pivot chief executive Jeanne Johns told the QUT Business Leaders Forum on Tuesday that the company’s 50-year-old Gibson Island fertiliser plant at Port of Brisbane would have to close if a long-term affordable gas supply was not found.

She revealed the company had formed a “red team” to prepare a contingency plan if the plant, which employs more than 400 people, had to be shuttered.

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Ms Johns said that the LNG export boom had resulted in a tripling of gas prices on the eastern seaboard, leaving manufacturers struggling to get a reliable supply.

Part of Incitec Pivot's fertiliser plant at Gibson Island, Brisbane

Gas is a feedstock used in the production of fertiliser.

Ms Johns said the Gibson Island plant had been able to obtain a bridging supply of gas for this year after an existing contract finished last September. But a long-term contract was needed to ensure the survival of Gibson Island for the foreseeable future.

“We were told that when the LNG plants came on line that domestic supply would not be disrupted but it has been disrupted,” she said. “(The future of Gibson Island) is still uncertain. Eighty per cent of the gas is being exported leaving only 20 per cent for domestic use.”

Incitec Pivot chief executive Jeanne Johns says gas supply was a major concern. Picture: AAP Image/Richard Walker

She called on state and federal governments to allocate a percentage of gas for the domestic market, similar to a scheme already operating in Western Australia. LNG export projects in Western Australia must reserve 15 per cent of LNG production for domestic use.

Ms Johns, a former BP executive who helped the energy giant recover from the disastrous Deepwater Horizon oil spill in 2010, said Incitec was preparing for the eventuality it may have to close Gibson Island.

“It is always difficult to plan if you don’t know whether you will have affordable gas or not,” she said.

“So we have formed a red team to prepare a contingency plan if we have to close and a blue team to work on options for keeping it open.”