LNG Spending Boom

[Tree]

And exactly where is XOM's #1 priority per Wood Mackenzie?

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LNG set for 'spending boom'

Steve Marshall 

 05 August 2013 10:03 GMT

Capital spending on liquefied natural gas infrastructure is set to more than double to around $228 billion over the next five years, driven by a global gas demand boom, according to a new market forecast.

The period from 2013 to 2017 will see major investments in facilities for onshore and offshore liquefaction, as well as LNG regasification terminals and LNG carriers, with the expected capex figure representing a 109% increase over the preceding five years, energy consultancy Douglas Westwood stated in its latest market report.

 Australia is leading the way with a raft of export projects that are set to be brought to fruition over the next few years – including BG Group’s Queensland Curtis LNG scheme and expansion of Chevron’s Gorgon LNG – while Shell and ExxonMobil aim to develop their respective Prelude and Scarborough fields using giant floating liquefaction vessels.

“Activity over the next five years is underpinned by huge financial commitments  to both liquefaction projects and gas import facilities,” said report author Michelle Gomez.

While spending on Australian projects is expected to peak in 2015 and then taper off slightly over the subsequent two years, she believes this will be offset by “significant growth” in LNG exports from other regions such as Russia, where the Yamal LNG project is being developed by Novatek, as well as Africa and Asia.

Liquefaction schemes are expected  to account for around $143 billion, or 63%, of forecast spending with about $50 billion earmarked for import terminals.

Douglas Westwood director Steve Robertson also sees a geographical shift away from the Middle East as the main global hub for LNG exports, with the region set to see "very little expenditure" over the coming five-year period.

As well as Australia, large gas discoveries off East Africa and in the eastern Mediterranean will see these regions figure more prominently on the export radar screen, while the US is also gearing up for exports of shale gas output that are widely expected to kick off around 2015.

Farther down the road, Robertson expects prospective gas discoveries in the Arctic to pave the way for exports from the frontier region.

[Tree]

Wood Mackenzie view contradicts XOM priorities listed above. If the lower priority projects make up a spending boom can we assume the highest priority projects will also be part of that boom?

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"* PNG LNG expansion appears to be XOM highest LNG priority. Perhaps more than Gorgon expansion, Scarborough FLNG, NA shale plays, far eastern Russia and East Africa"

[Spartina]

Perfect storm.

[ArtM72]

I guess all the global analysts are stuck on the figure that PNG only has 29 TCF. So long as this continues my read would be that PNG related investments will remain attractive.