The CSG-LNG projects, APLNG, GLNG and QCLNG, do not have enough low-cost gas to economically supply their long-term contracts in a low price environment. The three projects have already spent around US$35 billion developing their upstream supply areas, which will provide just under half of the plants' gas requirements between now and 2040. However, the majority of the yet-to-be-drilled acreage has much higher development costs and we estimate that up to 43% of this acreage could be at risk of being uneconomic if prices are low. The decision to develop new acreage will therefore depend on the financial position of the main players and their price outlooks, for both LNG and the Eastern Australian domestic gas market.
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Insight | Nov 2016
Australia CSG-LNG supply breakevens: are costs low enough?
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