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$66 billion demand; Japan’s demand for gas to change WA’s resources boom
Topic Started: 21 Sep 2014, 11:13 AM (3,859 Views)
Black Panther
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Oh dear. Looks like a few bears here have had their legs cut out from under them and are defeated.

Fukushima fallout drives Japan’s $66 billion demand for WA gas

WA’s resources boom story is about to change dramatically.

For years the headlines have solely been about China and our iron ore, but soon the rhetoric will be focusing on Japan and liquefied natural gas.

The value of LNG exports from Australia is predicted to increase as much as 360 per cent to $66 billion within a few years. WA accounts for nearly 90 per cent of the country’s LNG capacity.

Curtin University economist John Edwards, who was the principal economic adviser to former prime minister Paul Keating, said it was possible that by 2017 Japan could once again be Australia’s single biggest customer for exports.

It had been No. 1 for decades before being surpassed by China in 2009.

“Although it began with the boom in iron ore prices in 2003, the boom in Australian mining over the next decade will have quite a different shape,” Prof Edwards, who recently authored the book Beyond the Boom, said.

“The first decade was about prices, iron and China.

“The second decade will be about volumes, gas and Japan.

“As our LNG exports increase, and they’ll increase hugely, it’s likely Japan will be a more important customer for Australia than it is today.” Prof Edwards said the increased value of LNG exports would be more than the sum of the increased value of metallurgical coal, thermal coal and iron ore put together.

Chamber of Minerals and Energy of WA chief executive Reg Howard-Smith said WA’s LNG exports to Japan rose 15 per cent in 2013 alone.

“In volume terms, 75 per cent of WA’s LNG went to Japan,” he said.

The comments come as a rapidly falling iron ore price threatens to punch a $2 billion hole in the WA Budget. Iron ore prices this week dropped to $US83 a tonne.

It is now $40 a tonne lower than Treasury forecasted it would be.

Every $US1 a tonne fall in the iron ore price costs the budget about $45 million.

Premier Colin Barnett said the Fukushima nuclear disaster had seen public sentiment in Japan force the government to seek alternative energy sources.

This positioned WA’s LNG resources perfectly.

“Thirty per cent of its power generation was nuclear before the Fukushima earthquake and tsunami,” he said.

“Now they have about two out of 50 generating units operating.

“There is strong public opposition in Japan to go back into nuclear.

“The solution they see is to increase their use of natural gas and obviously Western Australia is going to play a very important part in supplying that.

“They’re very keen to see major gas projects come into production, particularly in this state and that’s happening with (Chevron’s) Gorgon and Wheatstone, and (Inpex’s) ­Ichthys.”

Inpex’s Ichthys project, located in the Browse Basin 220km off WA’s northwest coast, is expected to produce 8.4 million tonnes of LNG ­annually.

The Japanese company is on track and on budget to export its first shipment of LNG in late 2016.

Chevron’s Gorgon project is also based in the Browse Basin and is set to start producing at the end of 2015.

While its majority owned Wheatstone project won’t start until late 2016.

Mr Barnett said on a recent visit to Japan it was clear to him how highly authorities thought of WA.

“I met the Deputy Prime Minister and five other ministers,” Mr Barnett said.

“That would not happen with any other state.”

Chamber of Commerce and Industry chief economist John Nicolaou said Japan accounted for $23.9 billion, or 18 per cent, of WA’s export earnings in the past financial year.

“The CCI expects that based on these strong foundations that Japan will continue to be a pivotal trading partner for WA, particularly in the growing LNG market,” he said.

BY THE NUMBERS

• Japan is the third-biggest economy in the world and was worth about $US5 trillion in 2013.

• By 2017 Japan may be Australia’s biggest single customer for exports.

• In the next five years the value of Australia’s iron ore exports is expected to increase by 53 per cent to $87 billion.

• The value of LNG exports will increase by 360 per cent to $66 billion.

• Two-way trade between Japan and Australia was $70.8 billion in 2010, which was 10 per cent of Australia’s total trade.

• Japan is the third-biggest investor in Australia, with investment stocks worth more than $130 billion in 2013.

http://www.perthnow.com.au/news/western-australia/fukushima-fallout-drives-japans-66-billion-demand-for-wa-gas/story-fnhocxo3-1227065153546
Edited by Black Panther, 21 Sep 2014, 11:15 AM.
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Black Panther
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Must be hard for the bears to admit their delusions about WA crashing are wrong.

Perthite, NewJez ?

This will ensure Perth RE keeps growing strongly, surely you must now accept all your waiting for a post resource boom slump has come to naught ?
Edited by Black Panther, 21 Sep 2014, 12:55 PM.
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Drgonzo
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Black Panther
21 Sep 2014, 12:49 PM
Must be hard for the bears to admit their delusions about WA crashing are wrong.

Perthite, NewJez ?

This will ensure Perth RE keeps growing strongly, surely you must now accept all your waiting for a post resource boom slump has come to naught ?
I think you will find that completion from the US is expected to make it more difficult for Australia to export LNG because the capital cost here is so much higher.

http://www.smh.com.au/business/australian-lng-industry-faces-threat-from-us-exports-20140408-36b5p.html
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Jimbo
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Black Panther
21 Sep 2014, 11:13 AM
Oh dear. Looks like a few bears here have had their legs cut out from under them and are defeated.
The thing that surprises me BP is that you think this is news.

Everyone in WA resources knows about the Fukishima impact on gas demand and we have three major projects nearing completion that will more than meet demand.

Once these projects are complete, the labour requirements on site will fall massively because it doesn't take as many people to run gas plant as it does to design and construct.

This is old news.
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be :?: rising.
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Drgonzo
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Jimbo
21 Sep 2014, 01:39 PM
Once these projects are complete, the labour requirements on site will fall massively because it doesn't take as many people to run gas plant as it does to design and construct.

Spot on, only nimrods that don't understand how projects work can't seem to understand this.
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Black Panther
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Jimbo
21 Sep 2014, 01:39 PM
The thing that surprises me BP is that you think this is news.

Everyone in WA resources knows about the Fukishima impact on gas demand and we have three major projects nearing completion that will more than meet demand.

Once these projects are complete, the labour requirements on site will fall massively because it doesn't take as many people to run gas plant as it does to design and construct.

This is old news.
You bears are desperate and totally Deluded.

Read this bit again.

• In the next five years the value of Australia’s iron ore exports is expected to increase by 53 per cent to $87 billion.

• The value of LNG exports will increase by 360 per cent to $66 billion.


Now tell me this means the State is going to suffer a Resource Sector Slump anytime soon.

I'll spell it out for you Geniuses thinking RE is going to tank because of a Resource Sector Slump.

Perth will be challenging Sydney for most expensive Real Estate in Aus in the next 5 years.

RE growth in Perth will be very strong. The opposite to what you all were hoping.

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Jimbo
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Black Panther
21 Sep 2014, 12:49 PM
This will ensure Perth RE keeps growing strongly, surely you must now accept all your waiting for a post resource boom slump has come to naught ?
On the contrary, as the Wheatstone and Gorgon projects have been well under way for a good few years, prices have been propped up by the high demand for labour and local industrial input (much of the Australian Marine Complex in Henderson has been making stuff for Gorgon for the last few years).

Perth apartment rents had been propped up by engineering and management staff brought in from overseas and interstate.

As O&G site development was happening at the same time as mining construction, high labour demand increased wages dramatically and this filtered into all sectors such as Perth coffee shop Baristas and local office workers.

As things wind down, demand for 457 visas to WA in the first half of this year is down 43% which is huge.

If you can tell me how major projects winding down and falling immigration rates is positive for property prices, I would be interested to know. While you're at it, don't forget we are building record amounts of new housing supply as well.




Black Panther
21 Sep 2014, 02:03 PM
RE growth in Perth will be very strong. The opposite to what you all were hoping.
So why are prices down 1.53% qtr on qtr?

Why is stock on market increasing?

Don't forget, you predicted with certainty that Scotland would vote yes. How did that work out again?
Edited by Jimbo, 21 Sep 2014, 02:17 PM.
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be :?: rising.
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Poontang
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Japan intends to start firing up her nuclear power plants as well
There are some people who seem angry and continuously look for conflict.
Walk away, the battle they are fighting isn't with you, it's with themselves.

The first lesson of economics is scarcity: There is not enough of anything to satisfy all who want it.
The first lesson of politics is to disregard the first lesson of economics. ~ Thomas Sowell.

Who was the fool, who the wise man, who the beggar or the Emperor? Whether rich or poor, all are equal in death.
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lulldapull
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Boy, :lol

BP as usual is so fucking wrong, it's beyond comprehension! :lol

No local demand for gas, Russia China signing on a $400 billion dollar pipeline project. The largest in the history of this planet. That agreement on $9.80/ GJ garbaged away any sense of feasibility of doing CSG to LNG export projects down here.

All QLD CSG wells producing way below nameplate. Seriously compounding production/ viability issues for Santos/ QGC/ Origin. Shell pulling out of Australia and divesting Arrow.

Where do we stop folks? :lol ............It's a fucking joke, when Dave Knox of Santos says his bottom dollar is $19.50/ GJ.........how the fuck are we going compete? Gorgon, Pluto, Wheatstone are all over schedule and seriously over budget. The profit margins have been whittled away. These three WA projects have become poster boys on 'how not to do gas projects'. :bye:

P.S. Reality check for BP.............a GJ of gas in the U.S. is currently under $5 :lol
Edited by lulldapull, 21 Sep 2014, 02:49 PM.
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Kulganis
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Black Panther
21 Sep 2014, 02:03 PM
Read this bit again.

• In the next five years the value of Australia’s iron ore exports is expected to increase by 53 per cent to $87 billion.

• The value of LNG exports will increase by 360 per cent to $66 billion.
You do realise these are predictions don't you? No one predicted that Fe would go lower than $100, it was all over the news, the floor was meant to be $110, now it's meant to be $90, and the current price is floating around $80. In fact, everything I read expected prices to continue on an upward trend, everyone was very excited about it, so much so that there were new mines being built based on those predictions, now the chatter is which mines will be left after the rubble is cleared away.

It's you who is deluded, you really want the horoscope to be correct, but it's in the future, and no one knows the future.

I get it, you need the confidence trick to work just that little bit longer, but you've played the game for too long, the people you're trying to trick are starting to work out your methods and they're turning their backs in droves. Perhaps not everyone, but that will come.
"If man is to survive, he will have learned to take a delight in the essential differences between men and between cultures. He will learn that differences in ideas and attitudes are a delight, part of life's exciting variety, not something to fear." - Gene Roddenberry

"Balloon animals are a great way to teach children that the things they love dearly, may spontaneously explode" -- Lee Camp
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