Woodside boss calls for LNG policy certainty

PERTH (miningweekly.com) – Australian petroleum group Woodside on Monday called on the federal government to ensure that policy changes in the industry did not risk the country’s competitiveness.

Speaking at the Australian Petroleum Producers and Exporter Association’s (Appea’s) conference, Woodside CEO and MD Peter Coleman said that Australia’s liquefied natural gas (LNG) industry could, on a best-case scenario, rival Qatar as the world export leader in as little as six or seven years, but that the industry required a consistent and predictable policy.

“We are in a business that is highly capital intensive, requiring long periods of investment before any returns are seen. Government’s role is to ensure that in those areas we can control, regulation supports the quality and competitiveness of Australian LNG. This includes skilled migration and industrial relations policies to promote productivity. And environmental regulations which help to maintain Australia LNG’s superior record, but not to create inefficiencies,” he said.

Coleman noted that in an environment of increasing cost and international competition, Australian LNG was about to begin operating under a carbon price regime that none of the other major competitors would be subject to.

“We must ensure that this burden is not added by overlapping carbon reduction and energy efficiency schemes still operating at the state level in Australia. On top of this, we must ensure that environmental and safety case approvals for petroleum activities in Australia do not create unnecessary burdens.”

Coleman noted that despite the fears that added environmental and safety standards could add a burden to the industry, he was not opposed to high standards, as they were a defining feature of the Australian oil and gas industry.

“But we must ensure this regulation is as efficient as possible, avoids duplication, is transparent to all and achieves the intended environmental and safety outcomes.

“To be blunt, industry should expect the same world-class performance from governments and regulators as we expect from ourselves.”

Coleman said that the industry should set its sights on becoming the global leader in terms of long-term planning, values, integrity and a commitment to excellence.

“Our shared vision must be to ensure that Australia’s hard won reputation for LNG quality, reliability and safety is enhanced in the decade ahead.

“As the number of LNG operators in Australia increases, we will only be as strong as our weakest line in these areas. New entrants must bring their very best game to ensure standards are maintained, not diluted.”

He added that it would take a significant amount of long-term planning and resources, from both industry and regulators, to achieve this vision.

“Australian LNG is now in an important phase of project delivery that will see a game-changing expansion of our LNG export capacity. But we must look beyond the numbers to judge whether Australian LNG will be a true global leader in the years ahead.”