RE: Article11 Mar 2018 20:49
THE AUSTRALIAN � SOURCE �
Australia will miss next wave of LNG developments, Shell warns
PAUL GARVEY MARCH 11, 2018
Shell�s Prelude floating LNG tanker.
Shell�s Prelude floating LNG tanker.
Australia is likely to miss out on the next multi-billion-dollar wave of new liquefied natural gas developments, senior Royal Dutch Shell executive Steve Hill has warned, with the nation�s potential growth projects set to struggle to compete against rival proposals in the Middle East, Russia and Africa.
Speaking to The Australian in Singapore, Mr Hill said Australia had plenty of gas to supply both growing domestic markets and LNG exports, but warned the next crop of potential developments was unlikely to be competitive.
Shell, which has interests in the North West Shelf, Prelude and Gorgon LNG projects in Western Australia as well as the coal-seam gas-fed Queensland Curtis LNG plant, is increasingly bullish on the outlook for LNG after a highly anticipated glut in supply was comfortably absorbed by the international market last year.
China�s concerted efforts to drive down pollution drove a 50 per cent uplift in its consumption of LNG last year, while many other countries � particularly in Asia � are emerging as LNG buyers as they tackle their own pollution and energy security issues.
But while Shell is forecasting the international LNG market to more than double in size by 2035, the oil giant does not believe Australia will attract the sort of large-scale investment it witnessed over the past decade.
Mr Hill nominated the Middle East, Russia and east Africa as the regions most likely to support the development of new and expanded LNG projects, and said Australia was unlikely to figure prominently either as a source of new supply or additional LNG trains.
Instead, Australia�s LNG industry is likely to centre on connecting undeveloped fields into existing LNG plants that are running out of gas.
�I consciously didn�t mention Australia,� Mr Hill said.
�As some of the older projects start to see a decline in their existing supply arrangements, there�s clearly an opportunity for new fields to go in and keep those LNG plants running and keep supply in the market. But it�s not obvious that Australia would be competitive compared to some of the other alternatives I mentioned for new investment.�
While the Australian gas industry has come under scrutiny in the past year due to rising domestic gas prices, prompting the Turnbull government to introduce new powers that allow it to cap LNG exports if needed, Mr Hill said he believed Australia had �plenty of gas� to meet its domestic needs and support LNG exports.
After spending past few years digesting the massive wave of new LNG investments and navigating through the plunge in oil prices, Australia�s LNG sector has in recent months once again started to