Oil Search – a partner in a proposed Papua New Guinea LNG project – and Russia’s Gazprom have both said two deals signed last week between PetroChina and producers of Australian LNG give a strong positive signal for the overall LNG market.

Gazprom deputy chairman Alexander Medvedev told journalists on the sidelines of last week’s APEC meeting that having China finally agreeing to pay market prices for LNG was good for all producers, and PetroChina’s deals with Woodside petroleum and Shell Development Australia were not large enough to meet all of China’s huge demand for the commodity.

Things keep looking up.

Another Chinese giant, CNOOC, has indicated it is interested in Australian LNG, and Santos told investors in New York this week that it had been approached by potential buyers interested in the company’s Gladstone LNG project.

Meanwhile in a statement, Woodside has confirmed it is in discussions with “potential Asian buyers about significant volumes of LNG and a key terms agreement may soon be signed”.

The company confirmed one of these potential customers was Taiwan’s CPC.

Other reports were less circumspect. Several overseas news outlets reported CPC was about to sign a 2-3 million tonnes per annum deal with Woodside for Browse LNG, equivalent in size to the producer’s deal with PetroChina, which was last week hailed as being worth up to $45 billion, making it the biggest single resources deal in Australia’s history.

Gazprom and Oil Search have good reason to be optimistic, but it’s worth noting the first deals PetroChina signed were with Australian LNG producers.

This country has developed an enviable reputation as a reliable supplier, and while big customers are interested in diversity of supply, security of supply comes first.

In this climate, if California rejects Woodside’s proposed OceanWay terminal it will almost certainly live to regret it.

Latecoming would-be buyers may find themselves dealing with less reliable suppliers or even unable to buy any LNG other than expensive spot cargoes for most of the next decade.

California could well revisit the blackouts and brownouts it faced in the 1990s.