Warning on LNG forecast

energy

Nigel Wilson, Energy writer
April 13, 2007
PETROLEUM industry leaders will be warned next week that predictions Australia will become a world liquefied natural gas (LNG) superpower or even a dominant player are misplaced.
Robert Pritchard, managing director of energy consultancy ResourcesLaw International, will warn delegates at next week's annual Australian Petroleum Production and Exploration conference in Adelaide against widespread complacency in the local LNG industry.
Australia's six to eight projected greenfields developments faced competition from Qatar, Indonesia, Russia, Malaysia, the UAE, Oman, Iran, PNG and the Philippines, Mr Pritchard said.
The federal Government has forecast Australia will be exporting more than 60 million tonnes of LNG a year by 2020.
If all the LNG projects were to proceed it would represent an investment of more than $150 billion.
"As things stand not all the Australian projects on the drawing board will actually be developed," Mr Pritchard said.
He also warned that the West Australian Government's new domestic gas policy, imposing a requirement that 15 per cent of offshore reserves be set aside for domestic use in WA, could impede LNG developments.
APPEA chief executive Belinda Robinson said yesterday Australia's petroleum industry was at a crossroads.
Rapidly declining Australian oil production, unprecedented growth in global energy demand, global skills shortages, rapidly increasing project costs and the increasing preoccupation with robust climate change policy had created challenges and opportunities for the sector.
"If we don't take these issues in a deliberate, considered and rational way, Australia's petroleum industry ... will not realise its full and substantial potential," she said.
Federal Resources Minister Ian Macfarlane will release at the conference the results of an 18-month analysis of the petroleum sector, which reflects an industry view of what needs to be done to quadruple LNG capacity, increase the penetration of gas into domestic electricity generation and halt the fall in Australian oil production.
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