From the SMH on the recent China, Russia gas deal, gas industry consultant Graham Bethune of EnergyQuest said:
…”Australia’s LNG sector should be mightily concerned as the project cost for Russia in its China supply deal is about the same cost as our own Gorgon project – but with a capability to supply 80 per cent more gas,” Dr Bethune said.
“This deal has the very real potential therefore to be a game-changer in Australia’s key LNG market. To have any chance of seizing and participating in the next wave of LNG developments, Australia can no longer rely therefore on ‘being first in the queue’.”
…And floating LNG isn’t an easy get-out-of-jail card either. Costs need to fall – right across the industry.
We haven’t been first in the queue for eighteen months. This only underlines what we already new, the boom is dead and returns are not going to reach hoped for levels. Not that you’d know it at the AFR which has run with a Santos-provided feel good angle:
Santos’s head of liquefied natural gas markets Peter Cleary has pointed to Canada and Mozambique as Australia’s biggest competitors for new LNG investment, despite last week’s $US400 billion ($433 billion) deal for China to import vast quantities of gas by pipeline from Russia.
Mr Cleary said the nation-to-nation gas import deal between Russia and China still left plenty of scope for Australian LNG to compete in Asia and in China, where pressure for improved air quality would likely drive stronger demand for gas than many expect.
It’ll be harder to convince north Asia of that.
