BAKU, Azerbaijan, Dec.6
By Leman Zeynalova – Trend:
The pace of liquified natural gas (LNG) supply growth in Asia is forecast to slow over the coming years as project focus increasingly shifts from achieving absolute output growth to maintenance and extending the life cycle of existing projects, Trend reports with reference to Fitch Solutions.
“The shift in project dynamics will most clearly be seen in the region’s leading LNG producer Australia, where the line-up of mega-scale liquefaction projects that has driven an exponential growth in its LNG exports over the past decade, has now run its course. The majority of LNG projects that are due to be commissioned in Australia in the next decade instead comprise brownfield developments, most of which have been earmarked to replace depleting feed gas sources to existing LNG liquefaction projects,” reads the latest report from Fitch Solutions.
The exception will be the recently greenlighted development of the Scarborough gas project, offshore Western Australia, which will underpin the construction of a second production train at Woodside Petroleum’s Pluto LNG, according to the company.
“The remainder of the pipeline is composed of the planned developments of the Browse, Barossa-Caldita and Surat fields, all of which will backfill LNG export projects that are already in operation. These will allow Australia to sustain elevated levels of gas production and LNG exports over the duration of our forecast period, but at a much more measured pace compared to the previous decade,” the report reads.
Fitch Solutions notes that the longer-term outlook for LNG in Australia has also become slightly more uncertain, in the aftermath of its recent pledge to achieve carbon neutrality by 2050.
“This is not likely to bring immediate major changes to Australia’s LNG sector more so due to the current Scott Morrison administration’s strong backing for the fossil fuel sector (including LNG). Though it does not rule out the potential for a more renewables-focused energy policies later down the line under a different administration. This, in turn, could render hefty investments into new LNG projects in Australia less attractive, while putting projects still in the pre-FID phases at risk,” says the report.
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