A slump in energy prices that has led to the deferral of liquefied natural gas (LNG) projects around the world is set to be an unexpected boon for some producers trying to kickstart new ventures in gas-rich western Australia.
Keeping the plant’s five production trains at full tilt and maintaining the project’s market share in Asia is a priority for the NWS partners, as well as the state government which earns rich revenues from gas sales.
Both companies plan to supply gas through a 5 km interconnector pipeline being built by Woodside from its Pluto facilities to the NWS plant, due to be completed in 2022. An initial 1.5 mtpa through the interconnector will give it LNG at $2.50 per million British Thermal Units , much less than the $7 per mmBTU from new LNG projects around the world, said Credit Suisse analyst, Saul Kavonic.
The dominant local gas supplier, Santos Ltd , would be happy to talk about getting some of its gas into the NWS plant, “but we are not waiting for that to happen,” Chief Executive Kevin Gallagher told Reuters in emailed comments. Mitsui said it is targeting a financial investment decision with partner Beach Energy in the September quarter.
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