* Scarborough floating LNG project seen at risk
* Planned LNG projects hurt by near-50 pct fall in Asia LNG
* Australia's plan to become top LNG exporter still on track
By Sonali Paul and Henning Gloystein
MELBOURNE/SINGAPORE, Dec 22 Planned Australian
liquefied natural gas (LNG) export projects, including the
costly Scarborough floating vessel, are at risk as sinking
energy prices make investments unviable, analysts said.
A nearly 50 percent slump in Asian LNG prices LNG-AS this
year has pressured any project without a Final Investment
Decision (FID). Just last week, Woodside Petroleum Ltd
delayed the FID for its $40 billion Browse floating project with
Royal Dutch Shell and BP.
The next cab off that rank could be ExxonMobil and
BHP Billiton's $10 billion Scarborough project.
Scarborough will be "commercially challenging" to justify
given a raft of competing LNG projects, said Noel Tomnay, global
gas and LNG research head at Wood Mackenzie.
"China's growing pains as well as slugs of LNG coming into
the market: that's a fairly wicked combination. It would take a
very brave soul to ignore the prevailing market."
BHP and ExxonMobil were not available for comment.
The future for other Australian LNG projects without FID is
GDF Suez and Santos are seeking
alternatives for their Bonaparte floating project, Woodside has
indefinitely delayed its Sunrise project, while Shell has yet to
commit to its Arrow project where it has cut hundreds of
"I suspect most people will be hunkering down and trying to
get a real handle on how long and how far this situation will
persist," Origin Energy CEO Grant King said, referring
to falling energy prices.
Origin plans to start-up the $25 billion Australia Pacific
LNG project next year and has taken steps to shore up its cash
For existing or under-construction projects, low prices mean
smaller operating margins.
"They won't be loss making, but just won't make as much as
they otherwise would have done," Tomnay said.
Shell's Prelude floating facility, set to start up in 2017
as the world's biggest maritime vessel, will likely go ahead as
it is already being built.
Despite the tougher outlook, Australia's plan to become the
top LNG exporter remains on track.
With projects under construction going ahead as companies
treat them as sunk cost, Australia's LNG export capacity is set
to more than triple to 86 million tonnes a year before 2020,
putting it ahead of current leader Qatar which exports 77
million tonnes annually and U.S. expectations of selling 61.5
million tonnes per year by 2020.
(Additional reporting by Jim Regan in Sydney; Editing by Himani