(Bloomberg) — Australia’s top natural gas exporter is exploring new investments on top of the $12 billion Scarborough development that it approved last year on expectations that new supply will be needed to alleviate market tightness.
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The lead contender is the Browse development, Meg O’Neill, the chief executive officer of Perth-based Woodside Petroleum Ltd. said in an interview. That multibillion-dollar collaboration with majors including BP Plc and Shell Plc has struggled to get off the ground, with a previous plan to develop it into a floating LNG plant scrapped in 2016 because of weak prices.
The war in Ukraine, which has led to nations avoiding purchases from top exporter Russia, the energy transition and surging demand are creating a period of upheaval that has seen an unprecedented tightening of natural gas supply. Woodside and other Australian producers are joining their peers from the U.S. to Qatar in exploring ways to boost exports and bridge the worsening deficit.
“The industry has under-invested for the last few years,” O’Neill said by telephone. “We are seeing the market being structurally tight — to be able to address that, more investment is required.”
Europe is expected to boosts imports of liquefied natural gas to curb dependence on Russian pipeline fuel, outpacing additional supplies and keeping prices elevated. The high rates have benefited Woodside, which on Tuesday said that its first quarter sales roughly doubled from the same period last year.
A planned merger with BHP Group’s oil and gas business could also help unlock investments in fields outside Australia, according to O’Neill. BHP has several gas assets in Trinidad & Tobago, which could potentially supply that nation’s Atlantic LNG export plant, she said.
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