Home / Oil & Energy / General Energy News / Australia’s top gas producers undaunted by Qatar’s LNG expansion

Australia’s top gas producers undaunted by Qatar’s LNG expansion

Australia’s top two independent gas producers are confident their major new projects will be able to go ahead, even in the face of a massive expansion approved by the world’s biggest liquefied natural gas (LNG) exporter, Qatar.

Qatar Petroleum last week gave the go-ahead for the $29 billion North Field expansion, the world’s biggest LNG project, planning to boost its LNG output by 40% to 110 million tonnes a year by 2026.

To compete with that, Australia’s Woodside Petroleum plans to give the green light for its $11 billion Scarborough gas and Pluto LNG expansion in the second half of this year, while Santos Ltd aims to sign off on its $3.6 billion Barossa gas development before July.

“Everything’s coming together and I’m very confident. (Barossa’s) a low-cost-of-supply project. Only Qatar can beat it on cost of supply,” Santos Chief Executive Kevin Gallagher told Reuters.

Analysts estimate Barossa’s cost of supply at $5.50 million British thermal units (mmBtu), compared to Qatar Petroleum’s cost at just over $4 per mmBtu.

Barossa gas would be sent to the existing 3.7 million tonnes a year Darwin LNG plant in northern Australia from 2025.

“It’s a great location for Asian customers, with short shipping runs out of Darwin and a great track record,” Gallagher said in an interview after Santos reported a 60% slide in annual profit.

Woodside said on Thursday that Scarborough off Western Australia will have a cost of supply below $6.80 per mmBtu.

Woodside estimates LNG demand will grow by 4% a year to 2040, the company’s marketing chief, Meg O’Neill, said.

It is seeing interest from buyers seeking medium- and long-term supply deals.

“We know the Qataris are out there placing large volumes, but the buyer appetite is growing, the buyer universe is growing,” O’Neill told analysts on Thursday.

On the supply side, several LNG projects globally were put on hold last year after oil and gas prices crashed, and some major international companies have turned their attention to investing in renewables.

“The supply side will struggle to keep up and that normally means we’ll see stronger prices for the longer term,” Gallagher said.
Source: Reuters (Reporting by Sonali Paul; Editing by Tom Hogue)

Recent Videos

Hellenic Shipping News Worldwide Online Daily Newspaper on Hellenic and International Shipping