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Australian Energy Producers Journal Australian Energy Producers Journal Society
Journal of Australian Energy Producers
RESEARCH ARTICLE (Non peer reviewed)

Australia’s LNG wars – an industry under fire

Saul Kavonic
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Wood Mackenzie, 3 Church Street, #29-01 Samsung Hub, Singapore. Email: saul.kavonic@woodmac.com

The APPEA Journal 58(2) 569-570 https://doi.org/10.1071/AJ17053
Accepted: 2 March 2018   Published: 28 May 2018

Abstract

As the construction of Australia’s impressive liquefied natural gas (LNG) arsenal (that included multiple world firsts) ends, new weapons and tactics will now be employed. The industry is coming under fire politically, and new battle fronts are emerging as renewables rise in the power generation mix. Amidst the brave new industry landscape, some Australian LNG projects and companies will advance and add value, while others will retreat.

In this paper I ask the questions ‘how will the Australian LNG industry survive in the face of softer prices; and how will industry strategy be adapted?’ I will provide an outlook for Australia’s LNG sector and how it will continue the fight for market share at the global level. Cost will be king and Australia will march forward if the troops can be rallied. I highlight the challenges that the industry faces from various policy fronts, and discuss the risks posed by the ever growing multitude of cries for government intervention across the sector, as friendly fire from policy makers hamper progress. I critically analyse the case for domestic gas reinforcements: will a west east pipeline come to the rescue, or will Queensland LNG ‘advance to the rear’, or perhaps the world’s largest LNG exporter turn importer?

Opportunities for more value remain for the brave as Australia faces a new gas paradigm amidst tumultuous global conditions.

Keywords: disruption, export, policy, populist, storage, renewables, war.

Saul Kavonic is Wood Mackenzie’s head of oil, gas, LNG, renewables and energy for Australasia. He has delivered strategic consulting projects for major listed Australian and international companies across the upstream, downstream, LNG and logistics sectors. Saul has presented at leading industry conferences in the region and is regularly sought for comment on energy matters in print and broadcast media such as Forbes, The Australian Financial Review and Sky News. Prior to Wood Mackenzie, Saul worked with Woodside Energy, Australia’s largest LNG company, at one of Australia’s largest Venture Capital funds, MH Carnegie & Co., and also in corporate advisory roles in Africa. He has been an advisor on resources and economic development policy for African governments and institutions, including the United Nations Economic Commission for Africa and African Union Commission. Saul holds degrees in Law (Honours) and Chemical Engineering (Honours) from the University of Melbourne.