Australia’s Big Gas Deals With China & India
Kevin Rudd’s government is in a celebration mode following Australia’s twin victory in finalizing 20-year-long liquefied natural gas (LNG) supply deals with India and China. A sales and purchase AUD 25 billion agreement between ExxonMobil and Petronet LNG of India signed last week is the “dawning of a new trading partnership.”
Under the agreement, Exxon Mobil will supply about 1.5 million tonnes per annum of its share of LNG from the proposed Gorgon LNG project over 20 years. The gas will be delivered to Petronet’s new LNG terminal under construction at Kochi in southern India.
The Gorgon Project plans to develop the Greater Gorgon gas fields, located between 130km and 200km off the north-west coast of Western Australia. It has Australian subsidiaries of three leading international energy companies: Chevron, ExxonMobil and Shell. Chevron is operator of the Project with a 50% interest, and ExxonMobil and Shell each hold 25%.
“U.S. major ExxonMobil Corp has inked a deal to sell liquefied natural gas (LNG) from its share of gas from the Gorgon LNG project in Australia to PetroChina in a deal worth about A$50 billion ($41.3 billion), the Australian government said on Tuesday,” reports Forbes.
“PetroChina will buy 2.25 million tonnes per annum (mtpa) of gas from the Gorgon LNG project for a period of 20 years.” More here…
The LNG trade in India started in mid 1960s and has increased rapidly. In 1992 it was around 80 Billion Cubic Metres (BCM) per annum and crossed the 100 BCM mark in 1996. World trade in LNG is currently in the range of 150 BCM. The major exporting countries of LNG are Algeria, Qatar, Indonesia, Malaysia, and Australia.
Geographically, India is very strategically located and is flanked by large gas reserves on both the east and west. India is relatively close to four of the world’s top five countries in terms of proven gas reserves, viz. Iran, Qatar, Saudi Arabia and Abu Dhabi.
The large natural gas market of India is a major attraction to the LNG exporting countries. In order to encourage gas imports, the Government of India has kept import of LNG under Open General License (OGL) category and has permitted 100% FDI.