Conoco head, analyst have say on Arrow's proposed plant
LOCAL businesses are pinning their hopes on a fourth LNG plant for Curtis Island, which a resource analyst believes is the safer option, but the question of whether to invest comes while others say there's a glut in the industry.
With the time delay between the three LNG projects already underway and the approvals still needed for Arrow Energy to go ahead, it's another opportunity for the rental market, construction companies and labourers to benefit from a fourth LNG plant on Curtis Island.
But with Australia Pacific LNG plant owners ConocoPhillips warning that supply could outstrip demand, a resources analyst says Arrow has only two options: to build its plant or to tag onto one of the existing plants.
Head of Conoco's commercial Australia operations Mike Nazroo said in the longer term, capacity additions looked set to catch up and even overtake demand with the number of new LNG proposals in places such as North America and South Africa.
Patersons Securities' resources analyst Matthew Trivett said not all globally proposed plants would go ahead.
"I don't think much gas will come out of the (United) States, but it's something these guys investing billions of dollars need to look at."
But he said it was prudent for Arrow to look at having its own plant as opposed to using the other plants.
"The decision might fall into whether there's enough capacity to accommodate what Arrow wants to do," he said.
"It all depends on the commercial terms and more importantly accessibility to the infrastructure."
Mr Trivett said even if Arrow chose to partner with another LNG site for a period of time, it still had government obligations to keep the approvals it gets validated.
"Getting towards 2015 and beyond, capital expenditure throughout central Queensland will be reviewed on whether it's beneficial to further develop all of the infrastructure currently underway," he said.
- APLNG, worth $20b, project underway
- GLNG, $20b (est), underway
- QCLNG, $20b (est), underway
- ALNG, $15b, coordinator general approval 10/09/2013