Page 11 - GLNG Week 24 2022

GLNG COMMENTARY GLNG

able to come into force until January 2023. He
added that there has been “a misunderstanding Europe have moved to secure floating storage
of how the mechanism works or would work”. and regasification units (FSRUs), leaving few
The gas security mechanism was designed such units left over for projects elsewhere in the
by the previous government to consider annual world.
balances of supply and demand. It requires None of Australia’s planned import terminals
prior consultations with industry and regula- have yet secured FSRUs, and indeed, suppliers
tors before it can be triggered. While Bowen did of the infrastructure may well be treating Euro-
not rule it out, he said he would wait to speak pean users as a priority in the wake of the war in
to energy regulators before deciding on his next Ukraine and its implications.
steps. In late May, Woodside Energy’s CEO, Meg
O’Neill, said that Australia’s Viva Energy had lost
What next? its tentative booking for an FSRU from Hoegh
Gas producers in Queensland have responded LNG to a German user. Woodside has a tentative
to the supply crunch by stepping up output, but agreement to supply LNG to Viva’s proposed ter-
the AEMO said the pipeline that delivers this minal near Melbourne.
gas to southern states has already reached full “I think one of the things that’s going to be
capacity. challenging is the availability of floating storage
And producer Santos said years’ worth of regas units, the FSRUs,” O’Neill told Reuters on
local opposition to new gas projects had slowed the sidelines of the World Gas Conference in
developments that could have helped alleviate Daegu, South Korea. “So I’m a bit worried, actu-
the current shortages. ally, that what’s happened in Europe is going to
“We don’t have gas we can just turn on,” San- delay those opportunities in Australia.”
tos’ CEO, Kevin Gallagher, told reporters last According to the news service, all five Aus-
week. tralian LNG import terminal developers are
The company is nonetheless among those proceeding with work on their projects. Indeed,
taking steps to ramp up output, but given both their projects have taken on a new urgency. But
upstream and midstream infrastructure con- only Squadron Energy has chartered an FSRU
straints, there is comparatively little that can be already and started construction on its planned
done in the short term. terminal, Port Kembla LNG.
Meanwhile, geopolitical events are threaten- Waiting for a newbuild FSRU rather than
ing Australia’s plan to develop an LNG importing chartering one from the existing pool of regas-
industry. As gas shortages had been predicted to ification vessels could take until at least 2026,
emerge – but only from around 2024 – for some according to Hoegh LNG.
time, plans had emerged in the country for five In the meantime, Australia will still need to
import terminals. The first of these could be come up with shorter-term measures to allevi-
ready to enter service by the end of 2023. How- ate the gas crisis. Neither the gas security mech-
ever, as the European Union scrambles to stop anism nor the prospect of LNG imports offer an
importing Russian gas, various countries in immediate answer.™

Week 24 17•June•2022 www. NEWSBASE .com P11