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posted on:
March
02
2015

LNG lobby has well-oiled spruiking machine

 

Source: The Age, 2 Mar 2015


Farmers and environmentalists will be happy. Hong Kong power juggernaut CLP has just written off its stake in the Narrabri coal seam gas project to zero. Gas prices are falling, in line with the plunging oil price, putting high-cost projects put on ice.


AGL's incoming chief Andrew Vesey and his board must surely be contemplating the same for their CSG project at Gloucester. Same deal here: high cost, high community opposition; and for AGL, which has 6 million retail customers, prospective brand damage.


Santos did take an $808 million cut to Narrabri but still values its 80 per cent stake at $543 million. The rationale for the revaluation was that reserves were not as big as had been thought. Exploration methods, however, are sophisticated these days and it is likely that community angst and above all, falling prices for gas around the world were factors. The economic justification for high-cost CSG no longer exists.


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