LNG production target can't be met: Voelte

THE target of tripling Australia's LNG production within 10 years is unachievable, according to Woodside Petroleum chief executive Don Voelte.
LNG production target can't be met: Voelte
LNG production target can't be met: Voelte
LNG production target can't be met: Voelte
LNG production target can't be met: Voelte
LNG production target can't be met: Voelte

Capacity constraints, skills shortages and delays in project approvals make APPEA's goal of Australia producing 50-60 million tonnes per annum by 2017-2018 an impossible task, Voelte told journalists in Perth today.

"These things are too hard to build and there's not enough people to go around and there's not enough contractors to go around," he said.

Voelte thought only three or four of the proposed projects would get up, making it unlikely that the target would be reached even by 2025.

Australia has two producing LNG schemes - the Woodside-operated North West Shelf Venture and the ConocoPhillips-operated Darwin LNG. A third project, Woodside's Pluto development, is under construction, while another dozen or so schemes have been proposed to meet burgeoning global demand for LNG.

Woodside has a goal of building a new LNG train every two years. Voelte evidently believes his company has a headstart and other LNG proponents will struggle to find the resources to keep up with Woodside.

On Monday, Royal Dutch Shell executive director gas & power Linda Cook told journalists on the sidelines of APPEA 2008 Conference that the company's planned floating LNG production vessels could help Shell sidestep Australia's labour market and capacity constraint problems in developing LNG projects.

APPEA responded that its aspirational targets for increased LNG production were achievable, but only if there was real action on the part of both industry and government to get projects off the drawing boards and into production.

"It is clear from many of the speakers at APPEA 2008 this week that Australia has a huge potential - Jim Willets from Woodside listed $100 billion in mooted projects and Ben Hollins from Wood Mackenzie said we had the potential to be as big a producer of LNG as Qatar but were currently underweight," a spokesman said.

"We won't throw up our hands and say the challenges are too great. We believe the industry strategy sets out a positive work program over the next nine years to achieve real outcomes and more LNG on the water."

He also pointed out that the APPEA committee that had set the aspirational LNG target had been chaired by Woodside executive Agu Kantsler.

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