Regional LNG: NWS eyeing higher LNG price

Australia's North-West Shelf venture may win price rises for LNG sold to its original Japanese customers to more closely reflect the increase in crude oil prices, according to bank JPMorgan Chase as reported by Bloomberg.

The Woodside-operated venture has proposed a 30 per cent increase in LNG prices for its eight Japanese customers, based on $US65 a barrel oil price, JPMorgan said in a report, citing the Tex Energy Report. It was likely to win some increase, even if it was not as much as 30 per cent, JPMorgan said.

The $14 billion North-West Shelf venture, Australia's biggest LNG producer, has been negotiating with its Japanese customers for extensions to 20-year supply contracts that expire in 2009.

Woodside chief executive Don Voelte has stated that Woodside is pushing for greater parity between LNG prices and oil prices when crude prices are high.

So far, only one of the North-West Shelf's eight original Japanese customers, Chugoku Electric, has extended its LNG purchasing contract.

Negotiations on the other contract extensions may be "protracted" and are unlikely to be concluded by the third week of April as the venture is seeking, the Tex Energy Report said in its April 10 edition.

Voelte this week declined to comment on the report.(*)