THE head of the global oil giant Shell has brushed aside analyst concerns of an LNG supply bubble while singling out Australia as a key player in meeting what he called a looming surge in regional energy demand.
Speaking at the Asia Oil and Gas Conference in the Malaysian capital, Shell's outgoing chief executive, Jeroen van der Veer, stressed the bright outlook for Australia's LNG ambitions.
Mr van der Veer said he was "absolutely convinced" that the scramble for less polluting energy supplies, which are driving a swath of LNG projects, would outweigh the downturn in regional economies. "There's a lot of gas around, but there's a mismatch [between] where you find the gas and the markets - take Australia," he told journalists. "LNG is now only 2 per cent of world energy markets. Now think about what still could happen in Australia, and what could happen in … Chinese markets."
His comments contrasted sharply with recent warnings by industry analysts of a massive oversupply of LNG. In Australia alone, 11 LNG projects are planned for development in the next decade. If all are completed, the nation's LNG output would soar from its level of 20 million barrels a year at present to about 100 million barrels a year.
Last week the US consultancy FACTS Global Energy warned that LNG was "going to hell", while others raised concerns of a bubble caused by oversupply.
But a partner at the consultancy PFC Energy, Michael Rodgers, said traditional suppliers such as Malaysia, Indonesia and Qatar were relying on smaller supplies, leaving Australia to fill the gap. "The big question is how quickly can production at the North West Shelf come on stream to meet growing demand in the Asia-Pacific region," Mr Rodgers said.
The comments by Mr van der Veer suggested Shell - which already has stakes in the Gorgon, Sunrise, Browse and North West Shelf projects - could further bulk up its investment in Australia's LNG sector.
Asked about his plans for the country, Mr van der Veer said Shell would like to do a lot more, but he provided no details.
