Regional LNG: Australian officials visit California to expand LNG market: Report
Saturday, November 29 2003 - 05:45 AM WIB
"It (the U.S.) will be a huge market for everyone...I'm over here to indicate that Western Australia is ready, willing and able to do business," Gallop told Reuters in an interview.
LNG -- natural gas super-cooled and condensed for transportation abroad tankers -- is seen by many U.S. lawmakers and Federal Reserve Chairman Alan Greenspan as an important component of long-term U.S. fuel supply.
The visit of Gallop's delegation comes just a couple of weeks before U.S. Energy Secretary Spencer Abraham is due to host a global LNG Summit in Washington D.C. on Dec. 17 and 18.
The delegation's visit will include tours of proposed sites for LNG terminals in California and Baja California, Mexico.
Gallop said he didn't expect any deals to export LNG to the West Coast to be signed during the trip but it may not be too long before there may be some announcements.
"Gorgon in particular would be looking for a deal soon because they are getting close to investment decisions," Gallop said, referring to Western Australia's A$11 billion ($8 billion) ChevronTexaco Corp.-operated gas project.
Gorgon, a joint venture between ChevronTexaco, Royal Dutch/Shell, ExxonMobil , should be ready to make a decision on an LNG processing plant early in 2005 and want to ship by 2008, he noted.
"They are hungry for a deal," Gallop added.
PROPOSED SITES
The delegation is due to visit three proposed sites for LNG facilities on the West Coast, all planned by players active in Australia. One proposal from BHP Billiton would be in Southern California and the other two, from Royal Dutch/Shell and ChevronTexaco are planned for Baja California, Mexico.
Fed chairman Greenspan has touted LNG as the best available "safety valve" to tame soaring domestic natural gas prices. LNG imports could globalize the U.S. natural gas market, which has traditionally relied on at-home sources and Canada.
Australia is likely to face competition from countries such as Indonesia and Bolivia. Both are significantly nearer the West Coast than Australia, lowering transportation costs.
"It is a large distance, there is no doubt about that, but we have been successful in China competing with Indonesia, which is closer, and Malaysia, which is closer. We are confident we have the price competitiveness," he said.
Gallop said his country's close ties with the U.S. and economic and political stability would aid its cause.
"The big case for Australia is the stability. Sovereign risk is not an issue in Australia," he said.
Australia's LNG exports have traditionally headed largely for Japan, although in August 2002 it signed a $25 billion agreement with China to supply Guangdong province, one of the biggest export deals in Australia's history.
The delegation will also visit San Diego, San Francisco, New York and Washington D.C. during an 8-day trip.(*)