Australian LNG has a long history of pioneering investment. From the North West shelf to the first floating LNG project ever constructed.
Like other Australian commodities this history aligns with that of development economics of Asia. The first wave of Australian LNG development grew to service a modernising Japan and its demand for energy. This bilateral relationship has a long history of cordial relations, share-equity investment and oil-linked contract pricing to satisfy both parties.
The second wave of Australian LNG was far more chaotic, matching the staggeringly swift rise of the much larger Chinese economy. It began along with the pre-GFC oil boom and Malthusian assumption that the world was going to fall short of everything as the enormous Chinese and then Indian middle classes ballooned and consumed more energy per capita.
Multitudinous LNG projects were sanctioned in Australia which found itself by 2010 developing no fewer than seven LNG project simultaneously. Needless to say this did not end well with gigantic cost blowouts for all as they competed for labour and other resources.
Yet, as the commodity super cycle peaked in 2011, demand suddenly fell well short of expectations and kept doing so over the next four years. Making matters worse, the US shale revolution suddenly turned that nation from net LNG importer to net exporter of a magnitude equal to Australian LNG. The global glut from 2015 was enormous.
The Australian LNG boom included a particularly cavalier offshoot in QLD where coal seam gas was liquefied via three projects on Curtis Island. As the boom subsided, and oil-linked prices crashed, the companies involved were all either sold or destroyed.
The legacy left by the projects was one of very high Australian gas prices with very low Asian gas prices, also delivering an huge blow to the competitiveness of the east coast economy. Thus the $200bn investment proved to be the greatest single capital mis-allocation in the history of the Australian economy (and surely global energy markets) and was little more than a monument to Banana Republic economics as tax takes failed, income fell and hollowing out transpired on raised local costs.
MacroBusiness was the only analytic house to call the Australian LNG bubble early, track it and predict its demise. It continues to cover the LNG sector with daily updates and a large grain skepticism and is a must read for anyone that needs to know the economic forces coming to bear on the sector.
With friends like the AIG, who needs enemies? Tennant Reed, principal national adviser at the Australian Industry Group, said energy prices hikes for household of at least eight to 15 per cent were already backed by the regulator’s hike in the default price last week. It was likely this price would rise further over coming
Here it is: Woodside Energy will receive about $US1 billion ($1.4 billion) in cash as part of its $63 billion merger with BHP Petroleum that was completed on Wednesday – a deal that has turned it into a top-10 global independent oil and gas company. This will replace BHP with Woodside in the Gippsland JV
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Australia’s failed energy markets are now a full-blown national security crisis. Not a national interest crisis. A national security crisis. A war-profiteering energy cartel is pillaging the Australian economy, Most especially manufacturing, but absolutely everybody else as well. I am talking about scores of billions of dollars ripped from everybody’s pocket as if some greed
AIG today: “Apocalyptic rises in energy prices threaten chaos for industry and pain for households. They demand a national, integrated and strategic response,” Innes Willox, Chief Executive of national employer association Ai Group said today. “The extraordinary price rises, including a 50-fold spike in wholesale gas prices in Victoria, have seen market price caps imposed
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