Australian Petroleum Production And Exploration Association News

Australia's conservative government unveiled a radical plan on Thursday to restrict exports of liquefied natural gas (LNG) at times when domestic shortages push up local prices, aiming to ease soaring energy costs for local manufacturers. The plan would allow Australia's resources minister to impose controls on LNG exports on advice from the market operator and regulator, as the government seeks to cap domestic gas prices, which have become a political hot potato. "It's not a threat. This will be export controls.

Conventional wisdom in the liquefied natural gas (LNG) sector is that no new projects will be built for several years, given the vast cost can't be reconciled with the current low prices. This view has led some in the industry to predict that the market will flip back to a structural shortage sometime in the early to mid-2020s, once again sending prices soaring as new supply takes so long to be built and become operational. The cancellation or deferment of investment decisions on several projects in Australia, Canada, the United States and elsewhere seems to perfectly illustrate the view that no new LNG will be coming to market once the plants currently under construction are completed.

The Australian oil and gas industry is telling everybody that a second wave of investment in liquefied natural gas (LNG) plants is at risk unless labour and regulatory costs are cut. The companies are unlikely to get all that they want. In fact they may not get very much at all out of the labour unions and the federal and state governments. But it may not matter that much, because even with its high costs Australia remains one of the best places to invest the billions of dollars needed to develop a large-scale LNG project. Australia currently has seven LNG plants under construction. When all are completed by 2018 the nation will be the largest exporter of the super-cooled fuel, overtaking Qatar.