Yahoo: Queensland Govt Defends LNG Amid Falling Prices

Queensland's government says billions of dollars in royalties can be expected from its new gas industry as the state's first shipment of liquefied natural gas is poised to leave port.

The first cargo of LNG made from coal seam gas is being loaded on to a tanker off Gladstone in central Queensland.

The British Gas-owned Methane Rita Andrea vessel started loading two days ago and is due to leave soon for Asia.

However, the milestone coincides with a slump in oil and gas prices that have triggered fears the sector won't generate as many royalties for the state as hoped.

Mines Minister Andrew Cripps is not perturbed, saying commodity prices ebb and flow.

"They are notoriously volatile," he told reporters on Tuesday.

"I'm confident that this will be a fantastic opportunity for the state for decades to come because the size of the investment is very significant." MORE