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Sunday, May 21, 2017

Australia's LNG wars - who will advance and who will retreat?

Upgrade your Bentley with a £75,000 falcon perch Energy Expertise | Robust Analytics | Integrated Research HOME US ONSHORE OPERATIONS INTERNATIONAL OPERATIONS EVENTS LATEST NEWS ABOUT US CONTACT US Australia's LNG wars - who will advance and who will retreat? Amidst increasing above ground risks, domestic gas shortages and low prices, Australian LNG is in survival mode. Although current LNG prices are low, the short run marginal cost of Australia’s conventional LNG projects is under $1 per mmbtu. Meaning Australian LNG will remain cash-flow positive even through very depressed prices. Five of the eight mega-projects sanctioned since 2007 are now up and running with the remaining three projects – Wheatstone, Prelude and Ichthys – targeting start-up over the next 18 months. But resource competition, contractor disputes, and weather uncertainty mean schedules could be delayed. While conventional projects will advance, Australia’s unconventional coal seam gas projects will retreat in the face of high drilling costs. Around a quarter of the production could be left uneconomic around current price levels, with plants likely to operate below capacity for years to come. And the east coast domestic gas shortage means LNG production will be cut further as gas molecules are diverted to domestic markets where they will get higher prices, especially during winter. Saul Kavonic, Senior Analyst of Australasian Upstream Research, gives us a preview of his presentation on Australia’s LNG wars at APPEA 2017: Wistia video thumbnail If you are interested in meeting with our experts at APPEA 2017, please email us. Click here to learn more about APPEA. Will pricing levels rebound in the Lower 48 service sector? The State of the Upstream industry Complete the form below to receive a full set of our APPEA 2017 stand presentations. Recent Posts Smooth sailing or rough seas? IMO to cap sulphur in 2020 The State of the Upstream industry Australia’s LNG wars – who will advance and who will retreat? Will pricing levels rebound in the Lower 48 service sector? Will Centennial Resource Development’s Permian acquisition create value? Related Posts Vaca Muerta production to reach 113 kboed by 2018 Will pricing levels rebound in the Lower 48 service sector? Smooth sailing or rough seas? IMO to cap sulphur in 2020 The State of the Upstream industry About Wood Mackenzie Over the last 40 years, Wood Mackenzie, a Verisk Analytics business, has evolved naturally along the energy value chain to capture all the key components affecting global markets. Our integrated approach, including upstream, downstream, chemicals, gas and power, metals and mining and corporate analysis, allows us to spot trends and forecast future dynamics before anyone else. Learn more at www.woodmac.com Registered address: Wood Mackenzie Ltd. 16 Charlotte Square, Edinburgh EH2 4DF Registration number: SC222302 (Scotland) © Wood Mackenzie 2017

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