PM’s gas deal to cut Qld power prices, create jobs

A new landmark agreement between the state’s three biggest gas exporters will likely see power prices drop, Prime Minister Scott Morrison says.

A landmark deal with Queensland’s three biggest gas exporters is intended to lower power prices and supercharge the potential for manufacturing jobs in the state.

Prime Minister Scott ­Morrison will make the announcement in Gladstone today, as his regional Queensland blitz hits its third day.

It comes as Mr Morrison holds back from further ­commitments to see the proposed Collinsville coal-fired power station proceed.

But he said that if it did, it would have little impact on the nation’s emissions reduction targets.

Under a new agreement, Australia Pacific LNG, Queensland Curtis LNG and Gladstone LNG will offer more of their resources into the domestic market “on more competitive terms”.

It means the wholesale price of gas will likely drop, which would have a sig­nificant impact on costs ­manufacturers who rely on it for production.

Prime Minister Scott Morrison is seen in front of the head frame during a visit to South32 Cannington Mine in McKinlay on Wednesday. Picture: AAP Image/Lukas Coch

Mr Morrison said that boosting manufacturing opportunities would create jobs and was part of the nation’s economic recovery plan.

“Gas is critical to our ­economic recovery and this Agreement ensures Australian businesses and families have the gas supply they need at the cheapest possible price,” Mr Morrison said.

“This is about making Australia’s gas work for all Australians, while also ­supporting economic growth and backing important regional jobs in our expanding LNG sector.”

A similar agreement in 2017 contributed to wholesale gas prices dropping from about $12.50 a gigajoule to about $7 a gigajoule now.

Under that agreement, companies were required to sell gas into the domestic market if there was a local shortfall.

But under the new deal, if they have leftover product not being exported, it will have to be sold into the ­domestic market at a price partially determined by the Australian Competition and Consumer Commission.

Resources Minister Keith Pitt said it would mean ­affordable gas for manufacturers, while still encouraging new gas resource development. “We are working to get the right balance between ­affordable gas for manufacturers and a price that encourages new gas resource development,” he said.

More than 850,000 Australians are employed in manufacturing.

Prime Minister Scott Morrison emerges from an elevator at South32 Cannington Mine in McKinlay. Picture: AAP Image/Lukas Coch

Meanwhile, Mr Morrison toured the South32 Cannington silver, lead and zinc mine on day two of his Queensland blitz yesterday.

While neither he nor Opposition Leader Anthony Albanese have visited a coal mine in their roles, Mr Morrison said he would, but hasn’t had the opportunity yet.

“If the opportunity presents itself I will happily take that up,” he said.

Mr Morrison would not make further commitments to the proposed Collinsville coal-fired power station, ­saying the government had delivered its promised funding for the feasibility study into the project.

But he said Australia could still meet its Paris emissions reduction targets even if the power station was built.