Page 13 - AsianOil Week 34

AsianOil OCEANIA AsianOil

eastern markets. He said: “To ban exports of gas When the projects do eventually get up and
from Western Australia to the East Coast I just running – an apparently unavoidable necessity
think is un-Australian. It’s an appalling policy to according to AEMO, which has warned that East
adopt.” Coast gas shortages could emerge by the middle
While the move renders the NCC’s sugges- of the decade – they will have to compete with
tion of cross-country pipeline a moot point international buyers for any cargoes.
– highlighting just how difficult it will be for Prior to WA’s export ban, East Coast buyers
Morrison to co-ordinate a national energy strat- would have been able to tap into the state’s ring-
egy while state leaders prioritise local needs – fenced gas supplies at a cheaper price than those
also makes opening a west-east LNG shipping sold via existing LNG projects.
corridor a much more challenging prospect. APPEA’s Wilkinson said: “WA’s domestic gas
market has been well supplied for many years,
Import options with locally focused developments bringing sig-
Eastern Australia has a number of gas import nificant gas supplies into the WA market.”
projects – built around floating storage and Prior to McGowan’s ban, there was little to
regasification units (FSRUs) – on the drawing stop importers on the East Coast from under-
board. writing new onshore projects in WA to feed LNG
Viva Energy is one such potential developer, shipments to consumers on the other side of the
having thrown its hat in the ring in July when it country. Feedstock costs would be comparably
announced plans to build an import terminal in lower, after all, as would transportation costs.
Geelong. This will be part of a larger energy hub The perceived risk for WA, however, is that a
that will also include solar generation, hydrogen growth in west-east LNG cargoes would strain
manufacture and fuel storage. the local market and drive up prices.
The company said on August 17 that it aimed As the situation stands now, if these new East
to start preliminary design work on the terminal Coast import projects wish to buy Australian
before the end of this year. Viva’s project could LNG, they will be doing so via traditional LNG
allow it to become the country’s first operational terminals that already have long-term clients.
LNG importer, after AGL Energy’s plans to begin As such, the East Coast can expect to pay more
importing the fuel via a AUD250mn ($181.1mn) for the gas coming out of WA than it might have
facility at Crib Point in Victoria were derailed by prior to the ban. All this means that prices on the
the Mornington Peninsula council. East Coast are only likely to soar as the market is
The local authority’s August 18 rejection of linked ever more closely to international pricing
the plan, with assertions that the proposed devel- trends.
opment fell “short of demonstrating that poten- While Morrison’s government may tout eco-
tially significant environmental impacts of the nomic recovery through lower gas prices, the
project can be acceptably managed”, means that long-term outlook suggests a very different sce-
project start-up is likely to be delayed until 2023. nario is already unfolding.™

Week 34 27•August•2020 www. NEWSBASE .com P13