APPEA: Australia underweight in share of LNG supply

Rick Wilkinson
OGJ Correspondent

PERTH, Apr. 9 -- Australia has been called "underweight" in its share of the LNG supply market, given the size of the country's gas resources, according to Edinburgh-based consultants Wood Mackenzie Ltd.

Speaking at Australian Petroleum Production & Exploration Association's annual conference in Perth this week, Ben Hollins, WoodMac's head of European gas and power, said the pace of development of new LNG projects in Australia has been too slow because it is hindered by rising costs, disunity among joint venture partners, and obstacles to environmental approvals.

For example, Hollins pointed out that a jump in construction costs has delayed the Chevron Corp.-led Gorgon project.

Currently Australia has just two producing projects having a combined capacity of 15.2 million tonnes/year, and yet APPEA has set a target of up to 60 million tonnes/year of LNG production by 2017.

Hollins said that target looks increasingly unlikely to be met. WoodMac estimates Pacific Basin demand for LNG could jump 83% to 203 million tonnes by 2020, which is up from 111 million tonnes produced this year.

Hollins said there are at least 12 rival projects being proposed in Australia, and LNG buyers in Asia are frustrated at the slow rate of development. The buyers are also confused as to which projects might succeed.

"This creates a headache for them," he said "and that's not good for Australian interests either."

Chevron's Wheatstone Project and Shell's radical floating LNG proposal for Prelude field in the Browse basin are recent examples of the scramble by gas owners to get their projects to the starting line to take advantage of the forecast boom in global demand for LNG.

Hollins believes the Australian government needs to play a part in ensuring that developments do proceed.

Related Articles

Chevron to increase production, maintain capex level through 2017

03/13/2014 Chevron Corp. will increase production by 20% through 2017 without raising capital expenditures, executives said Mar. 11 at the company's annual se...

IHS CERAWeek: Oil executives cite rising business costs

03/04/2014 Demand for all types of energy continues to increase as oil and gas companies adapt to handle the ever-rising costs of finding and producing hydroc...

Chevron gets approval for Alder field, reaches FID

01/20/2014 Chevron Corp. UK subsidiary Chevron North Sea Ltd. has reached a final investment decision (FID) and received approval from the UK government to pr...

Feds call for revamp in safety regulation at US refineries

12/23/2013 The US Chemical Safety Board (CSB) has proposed a more-rigorous safety management regulatory framework for refineries in California that could exte...

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected