Boom conditions in Australia’s LNG industry saw a strong turnout at the Seventh Annual RIU Good Oil Conference in Western Australia. InvestorTV spoke to participants about the industry’s outlook.

Kate Williams:

“This year’s RIU Good Oil conference in Fremantle attracted a record number of junior oil and gas companies, all looking to catch the eyes of investors and brokers.

The ambitious explorers and producers left everyone in no doubt that Western
Australia was the place to be.”

Paul Underwood, chief executive Tap Oil Limited:

“Western Australia is energy rich in terms of gas exports particularly. The role that
Western Australia is playing in the global boom at the moment is significant.”

Kate Williams:

“In fact, Western Australia’s gas industry now produces 7.5 million tonnes of LNG per
year, and prices have tripled in the past 12 months.

“But companies warn that while prices may be surging, so are capital and operating costs.”

Paul Underwood:

“The costs have gone up materially. There’s been fourfold increases in rig rates, the cost
of people has gone up significantly and the cost of constructing projects. For example, Woodside’s LNG project at Pluto, which has gone up to $11 billion capital expenditure – that’s materially up on what it would have been five years ago.

“So the rewards are there, but the cost of getting those rewards has gone up also.”

Kate Williams:

“But most agreed that Western Australia’s recent LNG boom could push the nation’s
export business to new heights.”

Ian Tchacos, managing director, Nexus Energy Limited:

“I think if you look forward, people expect that Australia could be the second-largest
exporting nation for LNG behind Qatar.
“Right now we’re about number three or four. So Australia’s got a huge future for LNG.”