LNG projects have continued to drive investment in Australia’s resource and energy sectors over the past six months despite a slight fall in project value and progress, according to a government report.
LNG projects account for around 88 percent of the value of committed projects as at October 2015, Australia’s Department of Industry, Innovation and Science said in its “Resources and Energy Major Projects October 2015” report.
“The value of projects at the Committed Stage has fallen slightly with 35 projects worth $221 billion at the Committed Stage as at October 2015, compared with 39 projects with a combined value of $226 six months earlier,” according to the report.
“The downturn in commodity prices has encouraged many companies to implement cost-cutting programs to remain profitable. Reducing exploration and capital development expenditure has been one of the principal ways these savings have been delivered.”
The value of committed projects is declining and this will not be offset by new investments coming through the pipeline, which are being increasingly delayed due to adverse market conditions, the report said.
One of the “mega-LNG projects”, the Queensland Curtis LNG project, has recently been completed and another, the Gladstone LNG project, has started production, but remains on the major project list as it is yet to be fully completed.
There are still several “mega-LNG projects” under construction which are providing support to the total value of projects on the list, the report added.
LNG World News Staff; Image: Bechtel