A new multimillion-dollar joint Australian liquefied natural gas marketing body has been officially launched in Perth. However, it still does not have the support of all major players in the nation's LNG scene.
Woodside Petroleum Ltd., Shell Co. of Australia Ltd., BHP Petroleum Pty. Ltd., Chevron Corp., and BP Developments Ltd. have started up the marketing consortium, called Australia LNG (ALNG), in an effort to capture new business for the Australian industry from customers other than Japan, which is the main buyer of Australian LNG.
The companies are all participants in the North West Shelf LNG project off Western Australia. A sixth participant, the Japanese-based Mitsui & Co.-Mitsubishi Corp. joint venture known as MiMi, or Japan Australia LNG Pty Ltd., agreed to join the group shortly after it was launched.
The main refusal has come from Texaco Inc. unit Texas Corp. and Mobil Exploration & Producing Australia Pty. Ltd. Both companies are participants in the Gorgon LNG project (with Chevron and Shell), but they have said that any action that removes their ability to approach customers directly is not acceptable (OGJ, Mar. 29, 1999, p. 25).
Among them, the five companies so far in favor of ALNG own a substantial portion of more than 100 tcf of undeveloped gas reserves in fields off northern and western Australia.
The group believes the best way to sell LNG produced in Australia is to market the product under a single brand name, with the support of all the present and future LNG producers.
Until now, representatives of the various companies involved in the three or four potential new Australian projects have been regularly visiting potential new buyers in Japan, China, South Korea, Taiwan, and India. ALNG participants say that so many contracts by so many sellers representing so many different projects is a system crying out for reform.
NW Shelf expansion
In the meantime, new commercial negotiations have begun between the North West Shelf project partners and their eight Japanese buyers in an effort to secure a market for a $6 billion (Australian) expansion of the project, which calls for production of an additional 4 million metric tons/year of LNG.There are hopes of securing a letter of intent from the Japanese by mid-1999, although the consortium concedes the process could take much longer. The planned expansion is already 2 years behind its original schedule, which had called for the new capacity to start up by late 2003.
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