BG Group's Australian Project Doubles LNG Supplies
A smooth start to operations at BG Group's Australian project in Queensland is expected to help the British company to roughly double its liquefied natural gas (LNG) supplies in 2015/16, it said on Wednesday.
Seven cargoes have been shipped since December from the Queensland Curtis LNG facility, said Steve Hill, BG Group's head of global energy marketing and shipping.
The plant is expected to stop operations for about a week of maintenance in the near term before ramping up to full capacity, allowing it to ship about one cargo a week.
In the United States, BG Group has signed a purchase agreement for Cheniere Energy's Sabine Pass LNG terminal, with first deliveries due in December.
Eventually BG Group expects total volumes of 8 million tons from Queensland Curtis LNG and 5.5 million tons from Sabine Pass.
The company predicts that growth in global LNG supply will increase price volatility because new projects can cause a jump in supply while demand growth remains gradual.
Atlantic natural gas markets are already experiencing some of the biggest price swings in years as volatile European trade, freezing U.S. weather and Brazilian demand leave tankers torn over where to sail.
New supplies coming on stream have put pressure on the market, with leading consumer Asia's LNG prices slipping to a four-year low this year.
BG Group said it expects to take delivery of the U.S. Sabine Pass cargoes on which it has purchase agreements, rather than a worst-case scenario of paying fees but leaving the LNG unshipped, possible in a bear market.
The company has said that a final investment decision for its United States-based Lake Charles LNG project has been delayed until 2016 from 2015.
Copyright Reuters 2015.