APLNG partner sounds warning on potential of gas glut

A PARTNER in the construction of the APLNG plant on Curtis Island has warned new LNG plants here, in Europe, North America and Africa may outstrip demand, contrasting with recent bullish comments from the industry.

In a speech to an industry conference in Darwin on Wednesday, ConocoPhillips head of commercial in Australia, Mike Nazroo, warned that supply tightness might prove short-lived, News Ltd reports.

"In the longer term, capacity additions look set to catch up with, and even overtake, demand," Mr Nazroo said.

"Much of this supply growth is set to come from the Australian project wave, but there will be competing projects from North America, East Africa, Nigeria and Russia."

Mr Nazroo referred to McKinsey estimates that if 50% of all non-approved LNG capacity was built, there could be excess production by 2020.

"Therefore, we need to carefully consider how we invest and develop competitively here in Australia," he said.

Conoco operates the Darwin LNG plant, the smallest of three operating plants in Australia, and is building the Australia Pacific LNG plant at Gladstone with Origin Energy.

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