Wood Mackenzie’s Australasian upstream 2021 outlook report shows at least US$11 billion of gas projects poised for Final Investment Decision (FID) in 2021. With liquefied natural gas (LNG) backfill as the focus, these projects include three upstream FIDs – Mitsui’s Waitsia, Santos’s Barossa and Woodside’s Scarborough – and the Australian Industrial Energy (AIE) Port Kembla LNG import terminal which will supply the east coast market.
Australian Industrial Energy GeoConvention
The first project is expected to be Waitsia, located in the Perth Basin. The project will export LNG from the North West Shelf with production starting in late 2023. Next, Santos is expected to sanction the high CO2 content Barossa gas project late in Q2, despite its new carbon targets. Woodside is also likely to sanction the Scarborough to Pluto project. The lean Scarborough gas suits a new expansion train and Woodside can control the pace of a Pluto Train 2 development.
Wood Mackenzie also expects the Australian Institute of Energy to sanction the Port Kembla import terminal to supply the east coast market. With the formal final investment decision expected in Q1, 2021, the facility will operate on a toll basis with gas buyers reserving capacity.
Liquefied natural gas (LNG) imports will become the marginal cost of supply and domestic prices would rise as they move towards global LNG prices, including the cost of regasification. This is positive news for upstream players with uncontracted gas.
