The oil price rout could be a blessing in disguise for Australia’s liquefied natural gas producers.
Consultancy firm Deloitte cites 10 Australian LNG leaders as saying the long term outlook for LNG is “quite bright” as the world continues to shift towards cleaner forms of energy.
“The current oil price downturn, while painful, could be a blessing in disguise,” Deloitte said in a report on the Australian LNG industry.
“It is motivating operators to learn from the past and to innovate for the future, which in combination could take the sector to new heights.”
The report says LNG projects in other parts of the world could learn from Australia’s experience of higher costs and scheduled overruns, after 14 LNG trains were built over the past five years.
Respondents to Deloitte’s research said project owners could benefit the most from finding better ways to collaborate following years of wages spikes and cost blowouts.
One anonymous survey participant used the example of a concrete pourer who was being paid $250,000 a year at the height of the LNG infrastructure construction boom.
The report also said floating LNG projects, such as Shell’s planned Prelude project off Western Australia, would play a role in taking LNG to the next level Over the next 10 years, as delivery becomes more flexible.
“Floating LNG is expected to be a big part of this equation, as is further development of spot markets and trading operations around the world,” Deloitte said.
Australia is on track to overtake Qatar to become the world’s largest exporter of liquefied natural gas in 2018, and hosts a global LNG conference in Perth this week.