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+--- Thread: LNG continuation is on Rudd's mind (/showthread.php?tid=4191)
LNG continuation is on Rudd's mind - Tree - 07-17-2013
"COUTTS: But what specifically were you talking about the LNG project, the projects that are already in mind or is there sort of smaller projects that you're talking about?"
Apparently Conn made earlier comments on LNG continuation which did not make it into the transcript. Rudd made LNG top priority on his 'flash visit'. Lobbying for AU service, exploration, engineering, manufacturing, shipping companies or maybe even EWC???
RE: LNG continuation is on Rudd's mind - Tree - 07-17-2013
Actually as I think about this, that original sub-sea pipeline plan from PNG to AU may still be in play. AU LNG plants and domestic gas market could benefit from PNG's cheaper feedstock too. Wouldn't surprise me at all.
RE: LNG continuation is on Rudd's mind - sydbod - 07-17-2013
sydbod slowly crawls out from under his rock and dips his toe once more into the pond of knowledge, hoping a big fish will not bite it off.
Ummmm!!! I suspect the Australian domestic LNG plants may have enough gas at the moment.
http://www.afr.com/p/business/companies/origin_santos_chiefs_fuel_speculation_ffVGXXdD8qSRtJE8UwJVHI
Arrow LNG has been holding negotiations on potential consolidation with rival LNG ventures in Queensland, raising expectations that owners Shell and PetroChina are moving towards scrapping plans for a $20 billion-plus stand-alone plant to instead join Santos or Origin Energy projects.
Origin chief executive Grant King and Santos boss David Knox on Wednesday both referred to talks with Arrow and held up the possibility of an amalgamation between their respective ventures and the Arrow project.
…Chief financial officer Simon Henry is expected to comment on progress at Arrow at Shell’s first-quarter results in London on Thursday.
I know the Santos managed Gladstone LNG project was also probably going to be a little short of gas for its 2nd train for some few months after startup as they had not drilled enough wells in the coal and time was running out, but this may also be solved now.
http://www.businessspectator.com.au/news/2013/7/5/resources-and-energy/gladstone-curtis-island-lng-projects-ink-pipeline-deal
"The pipeline deal will also allow the two projects to be able to buy, sell and swap gas between themselves."
RE: LNG continuation is on Rudd's mind - Tree - 07-17-2013
syd, it's not a feed gas quantity issue it is a feed gas price issue. The irony is the more CSG AU produces the higher the gas costs become!
As Henry stated in 2010 (paraphrase) 'If you can't compete with US shale prices then a serious look to continue your project is needed'
Market forces from US shale prices is what axed Browse and allowed IOC to nab Hession as CEO. Cheap feed gas and exploration upside trumps all else in LNG.
RE: LNG continuation is on Rudd's mind - Palm - 07-17-2013
I would guess the PNG to Australia pipeline idea is dead forever. Back in 2007 it was scrapped because the pipeline costs were expected to be $5.5 billion and that was up from $2.5 billion in 2002. So now we might expect it to be $7-$8 billion and that takes any economic advantage away. Plus that cost then was part of what ended up helping XOM decide that developing LNG in PNG was a much better plan, as well they knew landowner issues would be overwhelming. Now that PNG has established itself as a viable producer and they are investing in infrastructure, PNG gas/LNG will be produced in PNG. I think Rudd is looking more at what you stated in your first post. Aussie contractors have racked up huge contracts for mining and petroleum development in PNG and he wants it to stay that way. He's heard enough of PNG's talk about being frustrated with Australia and New Zealand being takers only as far as bilateral trade and I'd bet we see a lot more Aussie investment within PNG going forward if they expect to keep getting this contract work.
RE: LNG continuation is on Rudd's mind - sydbod - 07-17-2013
Tree, I am sorry I was not clear enough in my answer.
I was trying to reply to your comment of "... that original sub-sea pipeline plan from PNG to AU may still be in play. AU LNG plants and domestic gas market could benefit from PNG's cheaper feedstock too. "
The problem with the Australian gas market is that the real gas shortage is within NSW.
A gas pipeline from PNG to the top of Australia is hugely expensive and then we are faced with a bottleneck in the pipelines going through Queensland towards NSW.
The real reason why people in Australia, mainly NSW, are kacking in their pants is because the long term supply contracts for natural gas that were set at such low levels initially are new coming for renegotiation and will become global market value.
Sure it would be great if a new sub-sea/land pipeline was laid all the way from PNG to the NSW market, but I am sure you were not implying that, no matter how cheap the IOC gas happens to be.
Also the gas from the sub-sea pipeline would require take up from the huge Bauxite mine at the top end of Queensland (Weipa) and the aluminium production plant just south of Gladstone (Queensland) to have any chance of having a big enough market. Well, we know what has happened to the Aluminium mining and refining within Australia.
Likewise from the links I posted above, it looks like the LNG projects in Queensland will also have enough gas by themselves with what is happening there now.
I hope I explained myself a bit clearer this time.
RE: LNG continuation is on Rudd's mind - Tree - 07-17-2013
'Palm' pid='25834' datel Wrote:I would guess the PNG to Australia pipeline idea is dead forever. Back in 2007 it was scrapped because the pipeline costs were expected to be $5.5 billion and that was up from $2.5 billion in 2002. So now we might expect it to be $7-$8 billion and that takes any economic advantage away. Plus that cost then was part of what ended up helping XOM decide that developing LNG in PNG was a much better plan, as well they knew landowner issues would be overwhelming. Now that PNG has established itself as a viable producer and they are investing in infrastructure, PNG gas/LNG will be produced in PNG. I think Rudd is looking more at what you stated in your first post. Aussie contractors have racked up huge contracts for mining and petroleum development in PNG and he wants it to stay that way. He's heard enough of PNG's talk about being frustrated with Australia and New Zealand being takers only as far as bilateral trade and I'd bet we see a lot more Aussie investment within PNG going forward if they expect to keep getting this contract work.
http://www.distancefromto.net/distance-from/Papua+New+Guinea/to/Australia
Heck $8 billion is just your garden variety AU LNG cost blow-out.
990 mi. from central PNG to Darwin doesn't seem too outrgeous for a pipe. How long are PNG LNGs feed pipes again??
RE: LNG continuation is on Rudd's mind - Palm - 07-18-2013
In total about 532 miles; 250 for the subsea and 282 for onshore. Stuff that cost blowout in your pipe and smoke it. But what's another Aussie cost blowout going to harm? At least with the PNG gas they would get some liquids, as long as they are part owners of any resources. That would be some expensive conditioned gas. Better to develop that "cheap" Aussie CSG.
I bet petroleum discovered in PNG stays in PNG.