US and Canada step on the gas
JUST hours after the Canadian government approved its third export gas project, another US export gas project, this time in Texas, has moved closer to getting a green light.
The approvals come as concern is mounting that a large rise in North American gas reserves on the back of the shale gas boom will undercut much of the optimism of Australia's gas exporters over projects being developed off Western Australia and in Queensland.
Australia is set to be one of the world's largest gas exporters in the next five years, although growth prospects beyond that are being hurt by the increase in export projects vying for approval in North America.
On Tuesday Shell won approval for a project it is promoting in British Columbia, on Canada's west coast, which includes PetroChina, Korean Gas and Mitsubishi Corp as shareholders. Both PetroChina and Mitsubishi are participants in export gas projects in Australia.
As well, the US Department of Energy granted Pangea LNG approval to begin exports from its south Texas project. Pangea has been authorised to export up to 8 million tonnes annually of liquefied natural gas for 25 years.
Shell, also, has joined another consortium planning to export gas from Georgia, in the US south.
The inability of large vessels to use the Panama Canal always meant that gas exports from the US could only be exported to Asia from the west coast and Alaska, but that will change from late 2015 when the canal's capacity rises after a $US5.5 billion ($A5.28 billion) expansion.
This, along with surging gas reserves, thanks to the boom in shale gas in the US, will pave the way for gas to be shipped from the US gulf states to Asia for the first time.
The rise in the number of export projects seeking to get off the ground in north America comes as companies such as Origin Energy are seeking to win export orders so they can boost future shipments from domestic gas export projects.
It is developing a project with initial sales of about 9 million tonnes annually of gas exports, with a second tranche planned. It is expected to update investors this month on its progress in selling gas abroad, which will enable it to give the green light to the second tranche of its Queensland project.
Origin's partner in Queensland is ConocoPhillips, which is seeking to develop an export gas project in the US so as to export to Osaka Gas, which is also buying gas from the Origin's Queensland project.
The Pangea project needs other approvals before it can proceed, mainly from the US Federal Energy Regulatory Commission. It hopes to be in operation by 2018.