From Goldies:
Further Australian LNG FIDs in the next several years unlikely…
We provide feedback from the Australian Petroleum Producers & Explorers Association (APPEA) conference. Australia has 6 LNG projects under construction which are approaching start-up in 2015-17. Further LNG projects in Australia appear increasingly unlikely over the medium term, in the absence of structural labour market reform (which looks tough given the delicate balance of federal politics).
Some large off-takers still see LNG prices as too high
Despite LNG prices declining, it does appear that buyers are somewhat confused by how to optimize contract portfolios. Some consumers commented c.US$9/MMBtu is a price that should work for both parties; we are not yet convinced that suppliers in this region can capture the type of cost reductions needed to make new projects work at this price (PNG has a better chance than Australia).
If $9mmBtu ain’t going to cut it then what will they do when contracts erode and prices head lower?
Cost-out that’s what!
