UPDATE: NW Shelf Australia LNG: Spot Asian Demand Disappears
August 10 2009 - 1:02AM
Dow Jones News
North West Shelf Australia LNG President Peter Cleary said
Monday that demand for spot liquefied natural gas cargoes in Asia
has almost vanished this year as a result of the global economic
downturn.
"Spot demand for LNG in Asia, and Japan in particular, has
almost disappeared," Cleary said at the fourth annual LNG World
Conference.
North West Shelf Australia LNG is the marketing unit for the
Woodside Petroleum Ltd. (WPL.AU) operated venture in Western
Australia state.
In 2008, nearly all of the Shelf venture's production was sold
under contract to long-term buyers, mostly Japanese and Chinese,
Cleary said.
However early this year the market saw an "incredible reduction"
in Asian LNG demand due to the effects of the global financial
crisis.
The downturn came soon after the North West Shelf partners
completed a A$2.6 billion expansion, in September 2008, that
boosted the project's annual production capacity to 16.3 million
metric tons a year.
Not all of the extra production was committed to long-term
customers and this year the partners have sold spot cargoes to
India and Europe, and recently discharged a cargo in Kuwait, Cleary
said.
The six equal participants in the North West Shelf venture are
BHP Billiton Ltd. (BHP), BP PLC (BP.LN), Chevron Corp. (CVX), Japan
Australia LNG, a joint venture between Mitsubishi Corp. (MSBHY) and
Mitsui & Co. (MITSY), Royal Dutch Shell (RDSB.LN) and operator
Woodside.
Earlier Cleary said that Australia's total LNG production could
reach 100 million metric tons a year next decade if "over a dozen"
mooted projects in various stages of planning and development reach
fruition.
"If all these projects go ahead LNG production in Australia
could grow from current levels of about 20 million tons (a year) up
to 80 to 100 million tons of LNG produced," he said.
Some new Australian projects may not come on stream until
"around 2014" but will be well placed to take up a share of the
expected growth in demand for the fuel, particularly in the
Asia-Pacific region, including India, he said.
Cleary did not mention specific projects, but new ventures
include Woodside's Pluto, due to start LNG shipments in early 2011,
and Chevron's Gorgon, expected to make a final investment decision
in the second half of this year.
-By Stephen Bell, contributing to Dow Jones Newswires;
61-8-9244-4243; sgbell@bigpond.com