Conoco Says Australia Could Be Biggest LNG Exporter


Ichthys Field Detail Map
(Click to Enlarge)

Pluto Gas Field, Western Offshore Austra
(Click to Enlarge)

Pluto LNG Project
(Click to Enlarge)

Wheatstone, Iago, Gorgon Fields
(Click to Enlarge)

DARWIN (Dow Jones Newswires), Sept. 10, 2009

Australia could become the world's biggest exporter of liquefied natural gas, or LNG, by 2020, the head of ConocoPhillips' (COP) Australian unit said Thursday.

The comments came as Chevron Corp. (CVX) said it has signed three binding sales agreements to supply nearly three million tons a year of LNG from the proposed Gorgon project in Western Australia state to Japanese and Korean energy companies.

ConocoPhillips Australia President Joseph Marushack said that a final investment decision is still expected to be made for its massive Gladstone LNG joint venture in Queensland state with Origin Energy Ltd. (ORG.AU) by the end of 2010, with first gas to be shipped in 2014.

"Australia is ideally positioned to become a really dominant supplier," Marushack told an oil and gas conference.

"Today it's the world's sixth-largest supplier. In 10 years it could rank second, maybe first."

Qatar ranked first among LNG exporters in 2008, shipping 39.68 billion cubic meters, according to BP PLC's Statistical Review of World Energy. Malaysia, Nigeria, Indonesia and Algeria also exported more than Australia's 20.24 billion cubic meters of LNG last year.

ConocoPhillips' forecast isn't surprising as there are over a dozen LNG projects slated for startup in Australia and Papua New Guinea by 2016. There is some contention among market watchers whether Australia will be able to leapfrog Qatar, which is also adding more LNG production capacity.

Many analysts doubt that all of the Australian projects will be built, so Marushack's comments suggest the company has a positive outlook for its own Australian project and for others in the region.

The Chevron operated Gorgon project recently won the approval of the Australian government and analysts expect Chevron and its partners to make a final investment decision within a month.

Woodside Petroleum Ltd's (WPL.AU) Pluto LNG project, which is about three quarter complete and due to ship first gas by late 2010, has been earmarked for expansion to three production trains by 2013.

In a statement, Chevron said Japan's Osaka Gas Co. Ltd. (9532.TO) will buy 1.375 million metric tons annually, or mtpa, of LNG from Gorgon from the second half of 2014 for 25 years, with Tokyo Gas Co. Ltd. (9531.TO) agreeing to purchase 1.1 mtpa over the same period.

Subject to Australian foreign investment approval, Osaka Gas will acquire a 1.25% interest in Gorgon and Tokyo Gas a 1% stake.

Chevron has also agreed to supply its 50%-owned GS Caltex Corp. of Korea with 0.5 mtpa of LNG from Gorgon and other Chevron gas projects.

Also Thursday, an executive from Japan-based Inpex Holdings Inc.'s (1605.TO) Australian unit said that its Ichthys LNG joint venture with France's Total SA (TOT) at Darwin is planning to ship first gas in 2015 after making a final investment decision in 2010.

Inpex General Manager Darwin Sean Kildare said the joint venture will release an environmental impact statement for the project shortly, with an eight-week public consultation process to commence before Christmas.

Earlier, the chief minister of Australia's Northern Territory, Paul Henderson, said a final investment decision on the project, which he said is worth more than US $20 billion, is expected in late 2010.

Kildare said Inpex is aware that Japanese utilities are "premium" gas buyers, when asked about the progress of customer negotiations for the Ichthys project.

ConocoPhillip's Marushack said that aside from the impact of the global financial crisis, U.S. gas prices have been pushed down due to a flooding of the domestic market with local unconventional sources of gas.

But "over time", demand for LNG from all parts of the globe will be robust, and demand for LNG from the Asia Pacific region will be "very strong" when the global financial crisis abates, he said.

Australia is well placed to service the Asia Pacific market geographically and has a stable political environment that encourages the development of LNG projects.

ConocoPhillips and Origin are competing with four other ventures to convert an unconventional source of gas, coal seam gas, into LNG at the port town of Gladstone. In contrast, Inpex's project and many others plan to use conventional natural gas.

ConocoPhillip's Marushack said "coordination" is expected to occur between the Gladstone projects, but he declined to predict whether there will be any project consolidation.  

Copyright (c) 2009 Dow Jones & Company, Inc.

Related Companies
 Company: Total S.A.more info
 - Natref Refinery To Reach Full Output This Weekend After Disruption (Aug 4)
 - Big Oil Seen Vulnerable to Fresh Slump Despite Growth at $50 (Aug 2)
 - Total Beats 2Q Expectations Helped By Strong Cash Flow, Costs Cuts (Jul 27)
 Company: Woodsidemore info


 - Global LNG: Faltering Supply Prompts Short-Covering Price Rally (Aug 11)
 - Woodside Sees Output Growing 15 Pct Over Next Three Years (May 23)
 - Energy Titans Get Schooled in Sharing as Billions Seen Blown (May 9)
 Company: ConocoPhillipsmore info


 - Conoco To Start Dismantling Historical Norwegian Oil Platform (Aug 17)
 - ConocoPhillips Trims CAPEX After Posting Quarterly Loss (Jul 27)
 - ConocoPhillips to Sell Barnett Assets for $305 Million (Jun 29)
 Company: Chevron Corporationmore info
 - Glencore, Chevron Enter Mexico's Recently Opened Fuel Market (Aug 17)
 - Jacobs Expands MSA for Chevron's US Refineries, Terminals (Aug 9)
 - Nigeria's State Oil Company Signs Deals With Chevron, Shell (Aug 3)
 Company: Origin Energymore info
 - Energy Titans Get Schooled in Sharing as Billions Seen Blown (May 9)
 - Australia's Origin Energy Doubles Stake In Beetaloo Shale Gas Field (May 5)
 - Origin To Take A$1.9B Charge On LNG, Exploration Assets (Feb 15)
 Company: Inpexmore info


 - Australia's $180B LNG Megaproject Boom Enters Final Stretch (Aug 14)
 - Australia's $180 bln LNG Megaproject Boom Enters Final Stretch (Aug 14)
 - Inpex Says Floating Unit For Australia LNG Project To Set Sail Soon (Jul 10)
 Company: Tokyo Gasmore info
 - Tokyo Gas Gets Bangladesh LNG Terminal Feasibility Study Contract (Jul 27)
 - PetroVietnam Gas, Tokyo Gas May Establish LNG JV in Vietnam (Jul 11)
 - Tokyo Gas Buys Eagle Ford Shale Stake, Despite Loss from Prior US Purchase (Jun 21)
 Company: Osaka Gasmore info
 - Indonesia's Small-Scale LNG Plans Face Several Challenges (Apr 15)
 - Chevron Sees Australia's Gorgon Project Train 1 Restarting in 30-60 Days (Apr 6)
 - Chevron Ships First Gorgon LNG Cargo to Japan's Chubu Electric Power (Mar 21)
 Company: GS Caltex Corp.more info
 - S. Korea's GS Caltex Shuts Heavy Oil Upgrading Unit After Fire (Aug 10)
 - Run Rates at S.Korea's GS Caltex Back at 93% after Cut Due to Oil Spill (Feb 5)
 - S.Korea Completing Sea Cleanup 164,000 Liters Oil Leak-Coast Guard (Feb 3)
Events  SUBSCRIBE TO OUR NEWSLETTER

Our Privacy Pledge
SUBSCRIBE


Most Popular Articles


From the Career Center
Jobs that may interest you
Third Party Inspector - Air Compressors | NC | URGENT
Expertise: Client Representative|QA / QC / Inspection
Location: Mocksville, NC
 
Calbration Technician
Expertise: Certification Engineer|Instrumentation Technician|QA / QC / Inspection
Location: Houston, TX
 
Fieldman- Midstream
Expertise: Pipeline Operator|Pipeline Services|Process Technician
Location: Kermit, TX
 
search for more jobs

Brent Crude Oil : $52.72/BBL 3.31%
Light Crude Oil : $48.51/BBL 3.01%
Natural Gas : $2.89/MMBtu 1.36%
Updated in last 24 hours