Regional LNG: NW Shelf disappointed on South Korean LNG tender: Report
Thursday, February 17 2005 - 03:20 AM WIB
But the venture, operated by Woodside Petroleum Ltd, remains confident that a proposed A$2 billion expansion will be approved by midyear, a spokesman was quoted as saying by Dow Jones.
"Obviously we are disappointed that we were unsuccessful, but the competition for the Korean tender was particularly fierce," he said.
Earlier Wednesday, South Korea chose Russia's Sakhalin, Yemen Liquefied Natural Gas Co. and Malaysia LNG to supply 5 million metric tons of LNG over 20 years starting in 2008.
The North West Shelf was one of five projects short-listed out of 12 original contenders.
"It is disappointing as it would have helped kick start the fifth train expansion," said UBS energy analyst Gordon Ramsay, commenting on the tender result.
"Clearly this would have helped," he said, adding that South Korea was "pretty aggressive" on pricing.
But the North West Shelf partners are still planning to approve the expansion in the first half of this year, leading to a startup in 2008, the spokesman said.
"South Korea would have provided additional incentive for a commitment on Train Five, but we are still confident of LNG sales into Japan, South Korea and China in the longer term," he said.
A go-ahead on Train Five is conditional on "additional market capture" for LNG, joint venture approvals and "satisfactory project costs," the spokesman said.
The North West Shelf partners mainly export LNG to Japan and South Korea, though shipments to China are due to begin in 2006.
The venture - Australia's biggest single resource project - is also renegotiating long-term contracts with its foundation Japanese customers that are due to expire in 2009.
Woodside is operator and one-sixth owner of the shelf project. The other equal partners are BHP Billiton, Royal Dutch/Shell, ChevronTexaco Corp., BP PLC and Japan Australia LNG, itself an equal joint venture between Japan's Mitsubishi Corp. and Mitsui & Co. (*)