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Australia's LNG sector is in high growth mode for the moment, with 17+ LNG projects at various stages of development. We're endowed with favourable geology and proximity to the largest market for natural gas, and the growth trajectory is solid. We have launched projects on both coasts. However, we have a cost and productivity problem that unaddressed means no further expansion. The presentation sets out the big strategic variables to watch (supply, demand, pricing, contracting, sovereign risk, etc) and shares where there will likely be services demand. It's all about cost productivity and social license.
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Breakfast Seminar
Australia’s LNG Sector – Seeking Growth
Brisbane, April 2014
1 Australia’s LNG Sector – Seeking Growth
About your presenter: Geoffrey Cann
• Blog: www.geoffreycann.com
• Twitter: @geoffreycann
• Email: gecann@deloitte.com.au
• Phone: +61 (7) 3308-7125
• Youtube: www.youtube.com/user/gsccann
• LinkedIn: au.linkedin.com/in/geoffcann
2 Australia’s LNG Sector – Seeking Growth
Wither Australia’s Gas Sector?
3 Australia’s LNG Sector – Seeking Growth
The demand is real.
4 Australia’s LNG Sector – Seeking Growth
What about our share of supply?
5 Australia’s LNG Sector – Seeking Growth
We have a relative cost problem.
6 Australia’s LNG Sector – Seeking Growth
Source: APLNG, Geoscience Australia
We have the resources.
7 Australia’s LNG Sector – Seeking Growth
We have the projects.
8 Australia’s LNG Sector – Seeking Growth
Offshore Pipeline/Transport Onshore
Undersea Pipeline
We have installed the kit.
Subsea Wellhead
FPSO
FLNG (Prelude)
Offshore Platform
LNG Plant (Barrow
Island, Darwin,
Onslow)
9 Australia’s LNG Sector – Seeking Growth
UPSTREAM MIDSTREAM DOWNSTREAM
Gas well
Field compressors
Gathering system
Gas plants
Trunkline
Undersea Tunnel
Boy, have we installed the kit!
Curtis Island
LNG Plant
Market
H20
Pond
BO
WE
N
SU
RA
T
• 10,000’s of wells
• 20,000’s km of pipe
• 10’s of compressors
10 Australia’s LNG Sector – Seeking Growth
Who can read the tea leaves?
• Global Gas Demand
• Global Gas Supply
• Pricing
• Contract Structuring
• Emerging Resources
• Substitutes, Efficiencies
• Sovereign Risks
• Geologic Uncertainty
• Domestic Costs and Productivity
11 Australia’s LNG Sector – Seeking Growth
Are you being served?
• Transport
• Shorebase
• Logistics
• Utilities
• Spares (land, floating)
• Maintenance
• Inspections, Repairs
• Employee Services
• Emergency
• Turn Arounds
• Equipment Usage
• Expert Services
• Sustaining Projects
12 Australia’s LNG Sector – Seeking Growth
Costs, productivity, social license. That’s it.
• An enduring competitive
advantage – proximity to markets
• A 5 year head start
• 20+ year sustainable business
• Overheated
• Highly dependent on service
companies
• Significant strategic variables
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