Japan's $66 billion Demand For WA Gas

Holdfast

Holdfast

Well-Known Member
Silver Stacker
Fukushima fallout drives Japan's $66 billion demand for WA gas.

For years the headlines have solely been about China and our iron ore, but soon the rhetoric will be focusing on Japan and liquefied natural gas.

The value of LNG exports from Australia is predicted to increase as much as 360 per cent to $66 billion within a few years. :cool:

WA accounts for nearly 90 per cent of the country's LNG capacity.

Curtin University economist John Edwards, who was the principal economic adviser to former prime minister Paul Keating, said it was possible that by 2017 Japan could once again be Australia's single biggest customer for exports.



152438-816946e2-3fcb-11e4-9fcd-2dc30e9f71be.jpg

http://www.perthnow.com.au/news/wes...emand-for-wa-gas/story-fnhocxo3-1227065153546
 
Would that push up the price for domestic consumers? How does it work when offshore buyers are willing to pay high prices?
 
The Gorgon LNG plant is currently under construction, Japanese company's have a % of that. Majority shares is Chevron australia with just over 51% I cannot remember who else is the big share holder, maybe Shell with around 35%.
The Gorgon draws gas from the Gorgon and Janz gas fields. The Project is being built on Barrw Island which is around 50Km off the NorthWest/North WA coast.
 
SilverPete said:
Would that push up the price for domestic consumers?
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IMO the biggest driver of east cost domestic gas prices at the moment has been the restrictions on accessing supplies deemed to be available when the contracts were written. Despite the major f**k-up by one of the majors in their field development plans, there's no shortage of possible "cheap" gas, there's a shortage of government licences to successfully access it. The west coast story is a bit more complicated but in both cases the market has been sorting out the supply problems the way it always does - through price. People with long-term contracts at old prices have been onselling their gas to more profitable users, for example, while others have simply been switching away from gas.

SilverPete said:
How does it work when offshore buyers are willing to pay high prices?
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It works by scarce resources being allocated efficiently. Profits are maximised. People are better off by freely trading the fruits of their labour for the fruits of other people's labour. :)
 
Whichever way you look at it its great news for WA....As long as it does'nt push up prices for the locals?
 
Australia is expected to become the world's largest exporter of liquefied natural gas (LNG) within four years.

LNG is likely to contribute significantly to economic growth and overtake coal as the nation's second biggest export behind iron ore.

The gas boom is set to kick off from next year as LNG export volumes rise 70 per cent in 2015/16 and by an average of 42 per cent per year to 2018.

"Australia is set to overtake Qatar to become the largest exporter of LNG in the world," HSBC's Downunder Digest said.

http://www.tradingroom.com.au/apps/view_article.ac?articleId=5941513

North West Shelf Project

[youtube]http://www.youtube.com/watch?v=rbOn8SR6ZXA[/youtube]


The North West Shelf Project - Celebrating 30 Years

[youtube]http://www.youtube.com/watch?v=4_DCNC5nkm0[/youtube]
 
Kael said:
The Gorgon LNG plant is currently under construction, Japanese company's have a % of that. Majority shares is Chevron australia with just over 51% I cannot remember who else is the big share holder, maybe Shell with around 35%.
The Gorgon draws gas from the Gorgon and Janz gas fields. The Project is being built on Barrw Island which is around 50Km off the NorthWest/North WA coast.
Click to expand...

Exxon Mobil has about a quarter stake
 
Kael said:
The Gorgon LNG plant is currently under construction, Japanese company's have a % of that. Majority shares is Chevron australia with just over 51% I cannot remember who else is the big share holder, maybe Shell with around 35%.
The Gorgon draws gas from the Gorgon and Janz gas fields. The Project is being built on Barrw Island which is around 50Km off the NorthWest/North WA coast.
Click to expand...

From http://www.chevronaustralia.com/our-businesses/gorgon

The Gorgon Project is operated by Chevron. It is a joint venture of the Australian subsidiaries of Chevron (approximately 47.3 percent), ExxonMobil (25 percent), Shell (25 percent), Osaka Gas (1.25 percent), Tokyo Gas (1 percent) and Chubu Electric Power (0.417 percent).
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How many years of supply is there at current extraction costs?

What happens when the easily accessible reserves are tapped out, and how soon will that be?
 
TheEnd said:
Great great news for the whole country....yeehaa!!!
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Great news, except for domestic retail and industrial consumers of gas. I don't know about WA, but over here the local price is projected to rise substantially with the potential for massive job losses and serious damage to Australia manufacturing. And that's only in the short term. I'm wondering what happens when the cheap reserves are diminished and extraction costs escalate leading to massive prices locally.

Some quotes:

* For big industrial users, this is particularly bad news. 'We're seeing prices leap from historical averages of sort of $3 to $4 a gigajoule to $9 to $12 a gigajoule or more,' says Ben Eade, executive director of Manufacturing Australia. He says the impact of rising gas prices will 'dwarf the impact of the carbon tax'.

* A new report commissioned by industry groups and prepared by Deloitte Access Economics says skyrocketing gas prices will damage the Australian manufacturing sector to the tune of $118 billion over the next seven years, and lead to a loss of more than 14,000 jobs. 'The fact is, high energy costs are killing industry in Australia,' says Eade, 'and high gas costs in particular.'

* Even the companies who are willing to pay top dollar for gas are having a hard time finding it. That's because around 80 per cent of Australia's gas is now controlled by companies who are selling that gas to Asia. In fact, the big gas exporters have overcommitted to customers; according to Citigroup all three LNG hubs are having to buy gas from third parties in order to meet demand.


Australian gas market transformations - Deloitte Access Economics
Markets are undergoing unprecedented change. Deloitte Access Economics report provides a comprehensive analysis of the impact of rising gas prices on the Australian economy, and the manufacturing sector.

On the east coast:

* Gas prices are rising as the market links to international LNG markets
* Gas supply is tight and domestic contracting challenging, primarily because of uncertainty about the ability of coal seam gas developments fill the gaps left by LNG export commitments.

In the west:

* Gas prices are expected to rise strongly and, with tight supply, gas users are finding it difficult to secure new supply contracts.

This Deloitte Access Economics report, commissioned by an alliance of six industry associations, provides a comprehensive analysis of the impact of rising gas prices on the Australian economy, and the manufacturing sector in particular.

The changes will bring forth both positive and negative impacts, greater input costs associated with higher prices and greater risk arising from a more difficult gas contracting environment will have adverse consequences for many regions, states and industry sectors.

The report includes six case studies covering the impact on companies in manufacturing sectors as diverse as aluminium, chemicals, food and beverage and paper.

http://www2.deloitte.com/au/en/pages/finance/articles/australian-gas-market-transformations.html
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O.k SilverPete maybe things ar'nt going as good as I thought.

I'm sure the government will still benefit from the 66 Billion though and the consumers will be the ones paying the price???
 
SilverPete said:
How many years of supply is there at current extraction costs?

What happens when the easily accessible reserves are tapped out, and how soon will that be?
Click to expand...

Well the subsea pipe work has been designed and fabricated to last at least 50years
 
TheEnd said:
O.k SilverPete maybe things ar'nt going as good as I thought.

I'm sure the government will still benefit from the 66 Billion though and the consumers will be the ones paying the price???
Click to expand...

I'm really not sure. Maybe the revenue will be used to build a strong base for future Australian industries for example.
 
:P
Results not typical said:
Watch the Greens have a fit.
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I Just don't get it, people complain about things coming from China, and yet the one Industry that lets Australia Export on a large scale to China is under threat, especially here in Victoria.
 
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