North America Hungry for LNG  

Energy Review reports that North America is looking for LNG supplies from Australia, but that they are competing with local and Asian customers for access to the north west shelf gas reserves.

This is the first report I've seen that talks about the possibility of the existing north west shelf fields being fully forward sold (with the long term deal with Japan being added to by the deal with China and new speculation about a possible Korean deal as well).

Australia must develop its gas reserves to be ready to supply North America's huge and growing liquefied natural gas (LNG) markets, federal industry minister Ian Macfarlane said yesterday. But a report prepared for the federal and West Australian governments warns foreign appetite for Australian gas could threaten local industries.

The federal government is pushing for Australia to be a major supplier of LNG to Mexico and the west coast of the US. California is facing dwindling reserves of LNG from traditional suppliers in North America and Mexico is experiencing energy growth demand of about eight per cent a year.

On the Mexican leg of his North American visit Macfarlane toured the sites of two proposed LNG receiving terminals in Baja California, Mexico. Developing the offshore West Australian Gorgon gas project was vital, according to Macfarlane. The Gorgon partners are ExxonMobil, Shell and ChevronTexaco. ChevronTexaco won approval earlier this month to build a gas import terminal off Mexico.

But back in Australia, a study prepared for the federal and West Australian governments, has warned that overseas demand for West Australian gas could threaten up to $660 billion worth of minerals projects in that state, according to a report in today's Australian. The mineral-processing sector - including alumina and mineral sands industries - in Western Australia's south-west needs competitive energy prices to encourage new developments and expansion of existing projects, the newspaper reports. The study by Sydney-based Sleeman Consulting has said gas from existing North West Shelf project reserves will be fully committed if existing Japanese LNG customers roll over their contracts beyond 2009.