Woodside restates LNG shortfall after 2021

OREANDA-NEWS. The LNG market could face a supply shortfall after 2021 unless more projects are sanctioned in the coming years, Australian independent Woodside Petroleum reiterated today. The warning is in contrast to current market conditions where higher supplies are sending spot prices lower.

"We can expect to see real competition for LNG supply after 2020, it is clear that if projects don't take FID (final investment decision) now, then we could actually face a supply shortfall from as early as 2021. I think Woodside projects are well placed to fill this void," chief executive Peter Coleman said at the company's annual meeting.

Woodside is scheduled to make a FID next year on the Browse floating LNG project, which is in the Browse basin offshore Western Australia. The only other undeveloped LNG project where Woodside is the operator is the 4mn t/yr Sunrise FLNG project, which is located in the Timor Sea in an area that is jointly administered by Australia and East Timor.

"On Sunrise, I think we can expect to see some real progress once clear title and fiscal terms are established," Coleman said. He was less optimistic in February when he said he could see no change in the deadlock over the maritime border dispute between the two countries.

Woodside also forecast annual LNG growth to average about 3pc after 2020, whereas global LNG demand growth was relatively static last year.

Asia-Pacific will continue to account for 70-80 pc of global demand. Demand growth in the region is shifting away from the cornerstone markets of Japan, South Korea and Taiwan and toward China, India and southeast Asia, Woodside chairman Michael Chaney told the meeting.

"We think that LNG from the US could represent about 15-20pc of supply into the global market. It is clear that LNG from other supply sources will be needed and we see strong competition between proposed projects in Australia, east Africa and Canada," Chaney said.