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Curtis Island assets on the block as Shell warns over gas prices

Business

Shell will make a decision on whether it will sell off its $US2.5 billion ($A3.7 billion) of infrastructure assets on Curtis Island later this year.

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The global energy giant was playing down reports that the deal was imminent despite claims a data room would open this month.

Infrastructure investors have been knocking on the company’s door since it acquired QGC through its takeover of BG and the attraction to the assets is because they would be considered pure infrastructure that was not linked to commodity prices.

QGC was the company that gave rise to the coal seam gas industry in Queensland and was bought out in 2009 for $5 billion by the UK’s energy giant BG, which was subsequently taken over by Shell in a $US53 billion ($A79 billion) deal in 2015.

The assets are expected to include jetties and storage facilities on the island, near Gladstone.

Shell Australia chair Tony Nunan also said Queensland and Western Australia were likely to see the lowest cost gas for manufacturing because those states were the ones that had supported the development of the industry.

“We support work that increases supply of gas to the east coast market and reduces the cost of developing those resources. But realistically it could take up to a decade to deliver the benefits we all want to see,” Nunan said.

“Manufacturers who have their operations close to supply, like in Queensland, will be the ones that enjoy cost advantages.

“Our planning for the future must be based in reality. Today’s gas supply simply costs more to get out of the ground and bring to customers – not because of LNG exports, but because of the decline of Australia’s historically low-cost conventional gas resources.

“We must make sure that every molecule is extracted cost-effectively and is put to its most efficient use as responsible stewards of this national natural resource. We know creating pathways to ensure affordable access to sustainable, reliable energy – now and into the future – will be fundamental to Australia’s economic success.

“That also means ensuring industrial users operate as efficiently as possible, because ever cheaper energy alone will not overcome every obstacle to competitive manufacturing in Australia.

“Shell is already putting the building blocks in place to make sure we can all thrive through the energy transition. That includes partnering with manufacturers to provide the flexible and reliable energy solutions they need.

“Shell Australia will continue to play our part in securing Australia’s economic future, just as we have for the last 120 years.”

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