Australian expansion depends on gas pricing certainty: BASF

German chemical company BASF has stated ambitious Asia-Pacific expansion plans, but warned that Australia might miss out without the right policies on gas.

News Corp reports that BASF has $15 billion worth of investment planned in expanding its regional operations. The chemicals maker plans to make 75 per cent of its products in Asia Pacific by 2020. The article suggests that up to $1.5 billion could be spent in Australia as part of the plan.

“If we had access to gas at the right price here in Australia that would be the first step in the potential for an investment,” Ross Pilling, BASF’s Australia and New Zealand managing director, told News Corp.

“There is plenty of potential to go from gas through chemistry to downstream uses and to create an industry that actually exports this stuff. We are not doing this in Australia — we are actively doing it elsewhere.”

BASF has invested an estimated $6 billion in new plants in the US since 2009, spurred by the availability of cheap energy due to that country’s unconventional gas revolution.

As reported this morning, concerns about the effect of rising gas prices in Australia – as the local market becomes linked to prices in gas-poor Asian nations – are again in the news pages.

Manufacturing Australia predicts about 100,000industry jobs could be lost without intervention, and advises measures to reserve gas for local users.

Pilling said that he did not believe there was a shortage of gas, nor a need for a gas reservation scheme.

“It’s about getting it out of the ground and getting the supply side working in such a way that we can access this endowment for the benefit of the country as well as export it,” he said.

Last year Dow Chemical’s Australian-born CEO Andrew Liveris also said his company would set up new factories in Australia, but not before energy policy setting were addressed.




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