Ahead of LNG2019, Woodside’s Peter Coleman looks ahead to busy year [Promoted]
2019 looks set to be another big year for the global LNG industry, with a record number of projects set to take FID. Woodside, the Australian energy giant, is among those with major projects underway.
“The race is on to sanction new projects to meet the looming supply shortfall,” says Peter Coleman, CEO of Woodside and a plenary speaker at the industry’s flagship event, LNG2019, which takes place in Shanghai, China on 1-5 April. “We’ll be pushing ahead with our proposed projects, using existing facilities to develop new resources.”
These include Woodside’s ambitious proposal for a regional LNG production centre on the Burrup Hub in northern Western Australia, which could process more gas than the entire volume extracted from the North West Shelf since its start-up in 1984. Woodside envisages the development of up to 25 trillion cubic feet of gross dry gas resources through the Woodside-operated Pluto LNG and Karratha gas plant facilities and last year the company made good progress on its proposals to develop the Scarborough and Browse gas fields.
Coleman sees plenty of appetite for the new LNG supply. “We supply LNG into Asia and expect to see rising demand from both established and new markets,” he says. “We also expect to see progress on the construction of import terminals in Australia’s east to shore up gas supply to industrial and energy markets.”
Environmental policy drives growth
The increased role of gas in the global energy mix is expected to drive growing demand. “In addition to strong demand from Asia, we are also seeing rising LNG supply into Europe,” says Coleman. “Coal to gas switching will become increasingly attractive as the EU steps up efforts to address its surplus of emissions allowances, putting some rigour around its carbon pricing.”
It’s not just carbon emissions that are being targeted; new rules on sulphur emissions for the shipping industry will force shipowners to seek new cleaner burning fuels, build compliant vessels or retrofit existing engines. As the International Maritime Organisation’s 2020 deadline for a tighter sulphur cap on fuel approaches, Coleman expects to see increased demand for LNG as a compliant fuel. “It’s a challenge for the shipping sector to comply with the IMO rule but an opportunity for LNG producers to supply a growing market,” he says. “We are looking at setting up bunkering facilities in northern Western Australia so LNG can fuel the busy trade routes between Australia and China.”
While much has been made about the emergence of a spot LNG market, Coleman believes buyers will still seek the security of long-term contracts. “In recent years, we have seen some new flexibility in global LNG trading, but the prospect of an emerging shortfall may well revive buyers’ appetite for locking in supply over a number of years.”
China, the world’s fastest growing LNG market
And with LNG2019 looming – the first time the triennial event has been held in China – Coleman’s mind is clearly on the Chinese market. “We expect the demand for gas in China will continue to grow as more consumers are connected to the gas grid,” says Coleman. “This may not be as sudden as the dramatic surges in demand in 2017 that led to price spikes, but we think there will still be sustained growth.”
As well as speaking at LNG2019, Coleman is looking forward to what he calls the “terrific” networking opportunities of an event that attracts 11,000 attendees and over 240 high level speakers from all the major players in the global energy industry. Indeed, this is the only event where the industry will be able to see the chairmen of the three Chinese energy giants – CNOOC, CNPC and Sinopec - on stage together this year, not to mention the heads of companies such as Exxon Mobil Corporation, Royal Dutch Shell, Chevron Corporation, Total, Woodside and Gazprom.
“It’s a fascinating time for our industry and all the key participants will be at LNG2019, ready to talk about how we as an industry can respond to the rebalancing in the market,” says Coleman.
LNG2019 will be held 1-5 April 2019 at the Shanghai World Expo Exhibition and Convention Center. For more details or to book your place, visit www.LNG2019.com