Five-month wait begins

AUSTRALIA LNG, marketing arm of North West Shelf LNG, is now entering a waiting period of up to five months, having put the finishing touches on its bid to gain one of the industry’s most significant supply contracts.

The North West Shelf venture is one of three final tenderers hoping to have put the best foot forward to secure a 25-year contract to supply three million tonnes annually to China’s first LNG receiving terminal in Guangdong province.

Of far greater value than the initial supply agreement, however, will be the edge to secure further contracts in an expanding Chinese market. Coastal markets in the Fujian province and around Shanghai are expected to boost annual Chinese demand for LNG to as much as 10 million tonnes by 2010.

So even if, as has been speculated by some, the contract is split between the three projects invited to submit final tenders – the NWS joint venture, BP’s Indonesian project and the Rasgas Qatar project – Australian LNG is sure to find its way to Chinese markets.

Securing just one third of the Guangdong contract would still underwrite further expansion of the NWS project to include a fifth train, but Australia LNG vice-president Lou Montilla said all signals were indicating a sole contract.

Formal negotiations were now complete but further Chinese delegations, including senior management and technical personnel from the Guangdong terminal, could be expected this month.

Favourable characteristics of the ALNG bid included political stability and security of supply, Mr Montilla said.

These positives have been underscored by active support from both the WA and Federal Governments, including a delegation from the Prime Minister’s office.

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