‘Importing LNG into gasrich country not new’
“We would take those cargoes out of our portfolio, and we would decide where they come from,” Woodside Chief Executive Peter Coleman told reporters in February.
Exxon Mobil is a big wild card, as it is considering imports to protect its turf in southeastern Australia, where it has been the dominant supplier for nearly 50 years.
Its infrastructure and experience selling into the southeastern market put it in a unique position, said Exxon Mobil Australia Chairman Richard Owen.
“We’ve got some competitive advantage and probably have a little bit more time than some of the other players,” Owen said at a business event on Friday.
Importing LNG into a gasrich country is not new. Both Malaysia and Indonesia, the third and fifth-biggest LNG producers, have import terminals because transporting gas between islands by ship makes more sense than pipelines.
AGL, Australia’s No.2 energy retailer, is the furthest ahead with its import plan. Pending a state environmental review, it expects to make a final investment decision by early 2020, targeting first imports in 2021.
Its advantage over AIE is that it has an existing customer base for its gas.
AIE still hopes to be the first up and running, expecting approval from New South Wales this quarter for a mid-2020 start.
“We think there’s a significant shortfall of gas in the domestic market,” said AIE chief executive James Baulderstone.
AIE, working with the world’s biggest LNG buyer, Japan’s JERA, and Marubeni Corp on import plans at Port Kembla in New South Wales, has been talking to industrial customers for more than a year, without yet signing any buyers.
“We’ve had oil prices moving around a fair bit and a lot of our LNG is priced to oil. That’s obviously a big issue,” Baulderstone said. At US$60 a barrel for oil, several dollars below the current Brent price, AIE sees LNG imports as competitive with domestic pipeline gas.