huge market for aussie and mel lng

The fol is bouncing around the gas stocks on HC - first on Nexus, then Karoon.... It describes Woodside's view that global LNG will be in short supply and that Australian LNG will be best able to meet market needs.

So MEL will have large markets for its large gas resources, will make large profits and will develop to become a large company.



the australian yesterday

WOODSIDE Petroleum chief executive Don Voelte says Australia is ready to emerge as a global superpower of the liquefied natural gas industry, leapfrogging key rivals that are plagued by political instability and a dearth of fresh supplies.
In a bullish assessment of the LNG market as he prepares to step down as chief after seven years, Mr Voelte said Australia would capitalise on problems in rival markets if governments ensured favourable policy settings.

His comments, in an interview yesterday with the Australian Petroleum Production and Exploration Association, come as more than a dozen LNG projects representing more than $200 billion in investment are either under construction or proposed in Australia.

Mr Voelte dismissed as "naysayers" those who believed LNG markets would be oversupplied for some time.

He said no new LNG plants had been built in Russia since Shell's investment in the Sakhalin project in the 1990s, Iran had "basically shut down" and Nigeria was beset by civil unrest that deterred foreign investment.

Yemen and Oman had "run out of gas" and Malaysia and Indonesia had come to "the end of the road".

He said a decision by Qatar, the world's biggest LNG exporter, to place a moratorium on expanding its exports until 2013 meant there would be no new production there for at least 10 years.

"It's all about Australia," Mr Voelte said.

"The key fact is nobody is building LNG plants around the world for various reasons: everything from political tensions to just not having any gas left."

UBS Securities energy analyst Gordon Ramsay said Australia was likely to prosper and one reason was that LNG buyers were looking for diversity of supply.

Australia was attractive to buyers because of political stability and lack of sovereign risk.

Mr Voelte warned also about the fragile economics of major LNG projects, saying this meant the industry had to ensure it managed risks to avoid cost blowouts and delays.

Woodside's $14bn Pluto project in Western Australia has already been hit by cost blowouts of about $2bn and the timetable has been pushed out by nine months.

Mr Voelte said future risks included worsening labour shortages, the industrial relations climate and the federal government's plan to introduce a carbon tax.

"If Australia gets a reputation that they can't carry these projects off, these type of reputation issues can really damage an industry very quickly," he said. "Because we're talking tens of billions of dollars of investment; these aren't hundreds of millions of dollars.

"It's amazing how large these project costs are and how marginal the economics can get."