Mobil Oil Australia Ltd. has dashed hopes of a united marketing effort for Australian liquefied natural gas by deriding a recent proposal put forward by Woodside Petroleum Pty. Ltd. and Shell Australia Ltd. and endorsed by Chevron Asiatic Ltd.
Mobil is a partner in the proposed Gorgon LNG project off Western Australia.
The company maintains that the Australian LNG concept would preclude producers from competing at the customers' doorstep and ultimately could have adverse implications for domestic gas sales competition.
In promoting the idea, Woodside argues that confusion exists in Asia about the status of the various Australian LNG projects awaiting development. New LNG contracts in China, South Korea, Taiwan, and India are currently being sought by several projects.
Woodside has hit back at Mobil, saying that time is running out for the nation's LNG developers to form a united front. At risk are developments worth tens of billions of dollars in capital development costs and billions of dollars in potential export income.
NAGV project update
In a related development last week, Woodside and Shell said that a $13.6 million (Australian) study of the $10 billion Northern Territory domestic gas and LNG export venture, Northern Australia Gas Venture (NAGV), based on gas from the Sunrise/Troubadour/ Evans Shoal fields in the Timor Sea, indicates the project is technically feasible.However, there are insufficient customers for a development to be contemplated at this stage.
Since the study began 18 months ago, the expected growth in demand for LNG in Asia has declined substantially, and oil prices have tumbled. At the same time, competition in the region to be the next baseload LNG project has accelerated.
The NAGV proposal includes development of the Sunrise group fields and a 490 km pipeline to shore processing facilities to be built near Darwin.
The feasibility study was based on the potential for a two-train processing facility producing 7.5 million metric tons/year of LNG and 400 MMcfd of domestic sales gas.
Local competition comes from an expansion of the existing North West Shelf Project, plus the undeveloped alternatives of Gorgon off Western Australia and the Undan/Bayu field project in the Timor Gap area between Australia and Indonesia.
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