Exxon Finds Lack of Market Interest in Australian LNG Import Terminal
December 02 2019 - 2:02AM
Dow Jones News
By Robb M. Stewart
MELBOURNE, Australia--Exxon Mobil Corp. (XOM) has decided not to
push ahead with plans for a natural-gas import terminal in
Australia after failing to secure long-term customers to underpin
the development.
The Irving, Texas-based energy giant said Monday it had
undertaken an extensive study of the potential for importing
shipments of liquefied natural gas but it hadn't received
sufficient market interest to advance the project.
The proposed import facility, one of several projects being
considered around Australia's eastern seaboard by companies looking
to feed a tight gas market, had been pitched by Exxon as one option
to complement existing gas supply from its established production
operations in the Gippsland Basin. The company evaluated a number
of possible locations for the terminal in the state of
Victoria.
"We were seeking longer term contracts to help underpin the
significant LNG import terminal project investment and there was
insufficient interest from potential customers," the company said
in an emailed statement.
Exxon said it would continue to assess the market and work with
its customers to meet supply needs.
The company also continued to invest in the Gippsland Basin in
Bass Strait, including in exploration. Less than three months ago,
Exxon confirmed it was seeking buyers for its oil- and
gas-producing operations in southeastern Australia as part of
efforts to test market interest in a number of assets worldwide. No
agreements had been reached and no buyers identified, the company
said.
Manufacturers in southeastern Australia have struggled in recent
years with a sharp rise in gas prices, brought on in part by a boom
in exports of LNG to Asia from three big plants in Queensland and
restrictions by some state governments on developing gas fields.
That has spurred proposals from companies including power utility
AGL Energy Ltd. and a consortium backed by mining billionaire
Andrew Forrest to use vessels to store LNG, before heating it to
supply customers directly or through local gas-transmission
networks.
Industry consultancy Wood Mackenzie has estimated the east coast
could face a gas shortage next decade, driving the need for local
gas resources to be developed and for a LNG terminal to be in place
by at least 2025. It views the need for an import project in
Victoria as most urgent given the prospect of declining gas
supplies from the Gippsland Basin through the 2020s.
Write to Robb M. Stewart at robb.stewart@wsj.com
(END) Dow Jones Newswires
December 02, 2019 01:47 ET (06:47 GMT)
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