CSG-LNG consolidation back on agenda

Speaking to journalists after realising its 2010 financial year results yesterday, King said that while the company had earlier played down the potential for consolidation, he believed the time was right to start discussions.

“The time has now come to have those discussions,” he said.

“If those conversations are going to occur, now is the time because we’re all very close to FID (final investment decision).

“I suspect those conversations will occur over the coming months.”

Origin Energy is developing the Australia Pacific LNG project with partner ConocoPhillips.

APLNG is one of four major CSG-LNG projects earmarked for development at Gladstone.

Talk of consolidation in the CSG sector is not new, with the consensus that amalgamation would take place to save costs.

King said the discussions would most likely include potential upstream collaboration like its deal to sell around 190 petajoules of gas to BG Group’s Queensland Curtis LNG project, signed earlier this year, as well the potential to merge entire projects.

On the topic of signing up a foundation customer for APLNG, King said the company was in discussions and close to sealing a deal.

He also said that while FID on the 14-15 million tonne per annum project was on track to be made by the end of the year, the current political uncertainty in Australia after the inconclusive election result at the weekend was creating ‘some’ uncertainty in respect to the permitting process.

Origin released its environmental impact statement for the project in March and is hoping to have all state and federal regulatory approvals by year’s end.

“It’s fair to say that, given the current political uncertainty, it’s not yet clear at what rate and which government will progress those approvals,” King said.

“I think we have to recognise that clearly part of that election outcome is a substantially bigger Green vote and I suspect, therefore, they would have a substantial interest in how these projects succeed.

“If the prior government is returned, we’d thought those consents will come forward on the timetable articulated, if there’s a different government in place, it’s not quite [as] easy to say how quickly those consents would come forward.”

Wednesday, 25 August 2010
PetroleumNews.net
http://www.petroleumnews.net/StoryView.asp?StoryID=1139370