Australia’s liquefied natural gas industry faces “serious challenges” such as labor shortages that may force energy companies to delay, merge or cancel their projects, Moody’s Investors Service said.
Moody’s cited Woodside Petroleum Ltd.’s announcement on Nov. 30 that its Pluto LNG venture would cost A$900 million ($889 million) more and start about six months later than previously forecast. The increased cost “is symptomatic of Australia’s resource boom,” Saranga Ranasinghe and Ian Lewis, analysts at Moody’s, wrote in a report dated yesterday.
“While credit negative for Woodside, the cost overruns at Pluto also hold negative implications for the rest of Australia’s energy industry,” and its A$150 billion of proposed investments, the Sydney-based Moody’s analysts said. ...
“These are serious challenges,” the report said. “While we have a favorable view of the long-term LNG demand, these operating challenges will mean that some of Australia’s planned LNG projects will not proceed as currently anticipated. Whether that will lead to the merger of some projects, or to their outright cancellation, remains to be seen,” it said.
Friday, December 10, 2010
Australian LNG Projects to Face ‘Serious Challenges’
Bloomberg reports that Moody's are bearish about Australian natural gas and coal seam gas LNG projects following the recent cost blowout at Woodside's Pluto project - Australian LNG Projects to Face ‘Serious Challenges’.