Woodside Petroleum Ltd. Australia’s second-largest oil and gas producer, has stated that an initial deal with PetroChina signed in 2007 for the potential sale of 2 to 3 million tonnes per year of LNG from Woodside’s Browse LNG project, expired on Dec. 31 and the two parties were unable to reach an agreement to extend the deal.
Most analysts have stated PetroChina will seek other sources for natural gas which may create an opportunity for the Horn River basin and the planned LNG export facilities located in Kitimat, BC. There are two facilities currently being worked on in this area; a traditional land based LNG facility and a floating LNG processing plant. The land-based facility, Kitimat LNG has already entered into two supply deals one with Korgas of Korea, and Gas Natural of Spain. A deal with PetroChina would be icing on the cake.
As shale gas has fundamentally changed the natural gas market in North American by dramatically increasing the amount of reserves available, producers will need to open new markets outside the U.S. because the U.S. itself is seeing a 40% increase in domestic supplies. On the other hand, industry and governments need to consider this new abundance of natural gas as a cleaner alternative to oil and coal with international pressures to reduce CO2 emissions continues.
ABC News: China Pulls out of $40 Billion Australia Gas Deal
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