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Supply gap justifies Browse: Coleman

Woodside chief executive Peter Coleman. Picture: Nic Ellis/The West Australian.

Woodside Petroleum has stepped up its campaign for why the Browse floating LNG project should be sanctioned for development next year, pointing to a supply gap that will open up in 2021 in part because 60 million extra tonnes of liquefied fuel will be needed in China and India alone.

Speaking at Woodside’s annual investor day yesterday, managing director Peter Coleman and his senior executive team said project promoters and industry needed to support construction of about 15mtpa of LNG a year to avoid the supply shortfall from 2021.

Weak energy prices and a flood of new LNG supplies that will hit the market over the next three years, including about 60mtpa from Australia, have investors worried about new projects such as Browse.

Woodside conceded that LNG demand had been static over the past few years — mainly because of a lack of new supply — and that the liquefied fuel’s price would be choppy between now and the end of the decade as the new projects start flooding the market.

But by 2021, significant uncontracted demand for LNG in Asia would emerge, rising to more than 100mtpa by 2030 based on Woodside’s modelling.

Mr Coleman wants to be shipping first cargoes of liquefied fuel by 2021, based on a project final investment decision being m ade late next year.

He said Woodside —as oper-ator of the Browse consortium that includes Royal Dutch Shell, BP, Japanese consortium MIMI and PetroChina — was finalising key agreements.

It was also awaiting advice from the State and Federal governments on the new retention lease requirements for the permits that cover the Torosa, Brecknock and Calliance gas-condensate fields off the Kimberley.