https://www.miningweekly.com
Engineering|Exploration|Gas|LNG|Petroleum|PROJECT|Projects|Surface|Environmental
Engineering|Exploration|Gas|LNG|Petroleum|PROJECT|Projects|Surface|Environmental
engineering|exploration|gas|lng|petroleum|project|projects|surface|environmental

Australia’s next wave of LNG projects need to be better executed – analyst

29th May 2019

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

     

Font size: - +

PERTH (miningweekly.com) – Advisory firm Wood Mackenzie (Woodmac) has warned that Australia has to be more competitive to progress $50-billion-plus worth of planned liquefied natural gas (LNG) projects that are targeted for a final investment decision (FID) in the next three years.

Speaking at the Australian Petroleum Production and Exploration Association conference, in Brisbane, research director Angus Rodger said this week that being a traditionally high-cost location and with a history of big cost blowouts, Australian operators needed confidence that this round of projects could be delivered on time and on budget, for the next wave of project sanctions to progress.

The projects slated for an FID over the next three years include Pluto expansion and backfill projects such as Browse, Scarborough, Barossa, Crux and Clio-Acme.

The combined capital expenditure for these projects represents nearly half of Australia's forecast total upstream spend over the next five years.

While the forecast for global LNG demand was positive, with some 65-million tons a year of new LNG supply needed by 2025, Rodger noted that there were a lot of projects globally that were due an FID over the next 24 months.

“This has massive implications for Australia's next wave of investments. Lower costs and more brownfield developments this time round suggest Australian projects have a good chance of progressing, and of avoiding the mistakes of the last decade,” said Rodger.

“But this cannot be taken for granted. Many of these projects carry a multitude of joint venture (JV), environmental, engineering and sub-surface challenges.”

He added that although the industry was showing signs of better execution, many of the Australian fields were located in remote areas, had high levels of containments and faced significant JV misalignment issues.

“As such they do not represent slam dunks. One of the keys will be collaboration; if Australian operators can work together to reduce costs, then these investments stand a much better chance of lowering costs, competing with global portfolios and getting sanctioned,” Rodger said.

On the bright side, Rodger noted that Australia was not unique in experiencing issues with LNG execution.

“Globally, the whole industry has a long history of poor project delivery.”

Woodmac noted that less than 10% of global LNG projects had been completed under budget, and 60% experienced delays to schedules. LNG cost overruns in the previous boom averaged 33%, with Australian projects overrunning by 40%.

 

Edited by Mariaan Webb
Creamer Media Senior Deputy Editor Online

Comments

Showroom

Booyco Electronics
Booyco Electronics

Booyco Electronics, South African pioneer of Proximity Detection Systems, offers safety solutions for underground and surface mining, quarrying,...

VISIT SHOWROOM 
Rio-Carb
Rio-Carb

Our Easy Access Chute concept was developed to reduce the risks related to liner maintenance. Currently, replacing wear liners require that...

VISIT SHOWROOM 

Latest Multimedia

sponsored by

Magazine video image
Magazine round up | 01 March 2024
1st March 2024
Implats CEO Nico Muller
Implats expecting phased reduction in group output
29th February 2024 By: Martin Creamer

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







sq:0.164 0.198s - 108pq - 2rq
Subscribe Now