Take foot off the gas, analysts warn

COMPANIES behind Australia’s projected $200 billion investment boom in liquefied natural gas export projects are refusing to concede the need to adjust their aggressive development timetables in response to the financial crisis and the glut in global LNG supplies.

Federal Resources Minister Martin Ferguson agrees with them. He told an Australian Petroleum Production & Exploration Association conference he expected a $30-$50 billion final investment decision on the monster Gorgon project off Western Australia in the “very near future”, along with progress at a range of other LNG projects.

But several market analysts at the conference warned that, in the near term at least, LNG was in oversupply, and new supplies would rise by 25 per cent in 2010. In addition, the surge of gas production in the US from non-conventional sources, notably shale, had closed off that market to imports, as well as driving down gas prices.

The deputy executive director of the International Energy Agency, Richard Jones, said it was a “buyers’ market right now”. He also said he was unconvinced that the recent recovery in the oil price