Page 5 - AsianOil Week 23 2022

AsianOil COMMENTARY AsianOil

Port Kembla is the only
LNG import terminal
in Australia on which
construction has
started.

the current supply crunch, because it would end of 2023. However, as the European Union
not be able to come into force until January scrambles to stop importing Russian gas,
2023. He added that there has been “a misun- various countries in Europe have moved to
derstanding of how the mechanism works or secure floating storage and regasification units
would work”. (FSRUs), leaving few such units left over for pro-
The gas security mechanism was designed jects elsewhere in the world.
by the previous government to consider annual Most of Australia’s planned import terminals
balances of supply and demand. It requires have not yet secured FSRUs, and indeed, sup-
prior consultations with industry and regula- pliers of the infrastructure may well be treating
tors before it can be triggered. While Bowen did European users as a priority in the wake of the
not rule it out, he said he would wait to speak war in Ukraine and its implications.
to energy regulators before deciding on his next In late May, Woodside Energy’s CEO, Meg
steps. O’Neill, said that Australia’s Viva Energy had
lost its tentative booking for an FSRU from
What next? Hoegh LNG to a German user. Woodside has
Gas producers in Queensland have responded to a tentative agreement to supply LNG to Viva’s
the supply crunch by stepping up output, but the proposed terminal near Melbourne.
AEMO said the pipeline that delivers this gas to “I think one of the things that’s going to be
southern states has already reached full capacity. challenging is the availability of floating storage Most of
And producer Santos said years’ worth of regas units, the FSRUs,” O’Neill told Reuters
local opposition to new gas projects had slowed on the sidelines of the World Gas Conference Australia’s
developments that could have helped alleviate in Daegu, South Korea. “So I’m a bit worried, planned import
the current shortages. actually, that what’s happened in Europe is going
“We don’t have gas we can just turn on,” San- to delay those opportunities in Australia.” terminals have
tos’ CEO, Kevin Gallagher, told reporters last According to the news service, all five Aus-
week. tralian LNG import terminal developers are not yet secured
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 FSRUs.
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. (See: Santos to add rig terminal, Port Kembla LNG.
to Cooper Basin operations, signs new gas supply Waiting for a newbuild FSRU rather than
contract with Yara, page 10) chartering one from the existing pool of regas-
Meanwhile, geopolitical events are threat- ification vessels could take until at least 2026,
ening Australia’s plan to develop an LNG according to Hoegh LNG.
importing industry. As gas shortages had been In the meantime, Australia will still need to
predicted to emerge – but only from around come up with shorter-term measures to alleviate
2024 – for some time, plans had emerged in the gas crisis. Neither the gas security mecha-
the country for five import terminals. The first nism nor the prospect of LNG imports offer an
of these could be ready to enter service by the immediate answer.™

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