Aug 02, 2012
Australian LNG projects under threat from East Africa discoveriesBack
Expertise|Perth|SECURITY|Africa|Ernst & Young|Exploration|Gas|LNG|Projects|Resources|Security|Africa|Argentina|Australia|Mozambique|Spain|Tanzania|United States|Security|Gas Discoveries|Gas-hungry Markets|Natural Gas|Oil|Oil And Gas|Oil And Gas Leader|Recent Gas Discoveries|Security|Sufficient Gas|Cristina Fernandez|Dale Nijoka|Security|East Africa|Underlying Technology
© Reuse this
In a quarterly report, global oil and gas leader Dale Nijoka said LNG from East Africa could, in the long term, become more competitive than unsanctioned Australian projects, causing them to be delayed, reworked or possibly cancelled.
“In Australia, the pace of LNG development has resulted in mounting cost pressures for operators. There have been cost over-runs on a number of Australian LNG projects due to inflationary pressures in the local market and appreciation of the Australian dollar relative to the US dollar.”
Nijoka noted that a string of recent gas discoveries in Mozambique and Tanzania had led to a new LNG frontier emerging in East Africa and, although only initial estimates of reserves have been announced, it was believed that there was sufficient gas in place to support several large-scale LNG projects.
“East Africa is geographically well placed to meet the LNG demand in Asian markets,” added Nijoka.
He noted that the gas discoveries have sparked investment interest from both international and national oil companies. While some of the projects in the emerging regions were unlikely to proceed to immediate final investment decisions, Nijoka noted that there would be increased global competition for access to gas-hungry markets.
Meanwhile, Nijoka noted that the shale-gas dash in the US had resulted in a supply glut, which could turn the country into a net gas exporter. He said that despite the weak gas price outlook in the region, national oil companies’ appetite for access to unconventional gas projects in the region remained undiminished.
“The main driver of Asian national oil companies’ pursuit of these unconventional assets is to gain knowledge of the underlying technology in order to apply that expertise to other areas of the globe, as well as to ensure the security of supply.”
European companies were shifting their investment focus to Argentina again, after early shale gas exploration in the region resulted in disappointment.
Nijoka said that Argentina was estimated to have some 774-trillion cubic feet of risked recoverable shale gas resources, of which the Neuquén basin held more than half.
“However, the threat of resource nationalisation, such as in Argentina, continues to be a risk factor for oil companies,” he added.
In May, Argentina nationalised its biggest oil company YPF, seizing a majority stake from Spain’s Repsol as part of a move by President Cristina Fernandez to tighten State control of the economy.
Edited by: Mariaan Webb© Reuse this Comment Guidelines
Other Mining News
Updated 56 minutes ago Cabinet approved the five-year Medium-Term Strategic Framework (MTSF) of government on Wednesday, which would serve as the “building block towards the 2030 vision in the National Development Plan (NDP)”. The MTSF, which covers the period 2014 to 2019, reportedly...
Updated 5 hours ago South Africa should adjust labour laws so union members have to vote before striking, Deputy President Cyril Ramaphosa said on Thursday, suggesting the government may push ahead with reforms to curb damaging industrial action. The longest and costliest strike in...
Updated 4 minutes ago Despite a degree of ambiguity around the transfer of small business-focused promotion programmes from under the auspices of the Department of Trade and Industry (DTI) to the newly formed Department of Small Business Development (DSBD), Small Business Development...
Updated 17 minutes ago The International Monetary Fund (IMF) has once again lowered its 2014 growth forecast for South Africa to 1.7%, having previously forecast that Africa’s second-largest economy would expand by 2.3%. The 0.6% downward revision, which is contained in the World...
Updated 30 minutes ago A study on the economic state of the City of Johannesburg’s (CoJ’s) economy has revealed lagging growth and a lack of diversification as the city struggled to return to pre-financial crisis growth levels. The ‘CoJ Economic Overview 2013: A Review of the State...
Recent Research Reports
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
Real Economy Insight: Road and Rail 2014 (PDF Report)
This six-page brief covers key developments in the road and rail industries over the past 12 months, including details of South Africa’s road and rail network and prospects for both sectors.
Real Economy Insight: Steel 2014 (PDF Report)
This four-page brief covers key developments in the steel industry over the past 12 months. It provides an overview of the global and South African steel and stainless steel markets, South Africa’s major steel producers and events that have shaped these markets.
This Week's Magazine
Local aerospace company Denel Aerostructures (DAe), part of the State-owned Denel Group, has won a fourth contract to manufacture parts for the Airbus A400M military air transport and air-to-air refuelling aircraft. The new contract, which was won in an international...
Although CEO Mark McChlery and chief marketing officer Bob Skinstad likened themselves to children in a playground when taking on the task of “reengineering and repositioning” the Seartec brand, the “young, dynamic and enthusiastic guys” were like proud...
An increasing number of buyers, in both the new and used car markets, are opting for finance structures that lower their monthly repayments, says asset financing company WesBank. These include the use of large balloon payments (also known as residuals), as well as...
Tertiary education institutions can use search engine giant Google’s Chromebook to provide secure mobile end-point devices for students on which they can share documents, work collaboratively on documents and access education materials and applications being used...
Local ceiling and partition company Abbeycon has beaten global competition at the Saint-Gobain Gypsum International Trophy competition, which was held last month in Berlin, Germany.