Australian Financial Review: Two-year window to extend LNG boom

Australia’s largest foreign investor has warned the future multibillion-dollar expansions of two huge liquefied natural gas projects in Western Australia hinge on bringing about a “structural change” to Australia’s cost base.

In contrast to Prime Minister Kevin Rudd’s claim that the resources boom is over, Roy Krzywosinski, the local head of Chevron, said Australia had only a two-year window to get policy settings right or risk missing out to overseas rivals for up to $150 billion of pending LNG investment that could ­significantly prolong the boom.

At stake is a decision to start design work on an expansion of Chevron’s $52 billion Gorgon LNG project, which was already delayed from last year after a 40 per cent blowout in the US dollar cost of the initial project. The US energy giant also has ambitions for a later expansion of the $29 billion ­Wheatstone LNG venture.

“All the projects in our portfolio compete for capital,” Mr Krzywosinski told The Australian Financial Review. “Irrespective of who forms the next ­government, securing future energy investment will require a recalibration of government policy.” MORE