The SMH blog lifts some Alliance Bernstein research that makes an interesting point about Australia’s LNG boom:
Some Australian liquefied natural gas projects would never have received the go-ahead in the current low oil price environment and stand to be uncompetitive unless prices recover, according to Bernstein Research.
The plummeting oil price has dragged down the prices for LNG, with prices dropping to $US9 per thousand standard cubic feet (mscf), Bernstein said. Given the lag of several months between LNG prices and oil prices, LNG prices could fall further and test $US8 per mscf, creating a “problem” for the industry given the high fixed costs and prices required to generate a return on investment, the Wall Street broker said in a report.