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An industry analyst warns that Australia's natural gas boom may be about to bust.
Peter Strachan says any new projects are going to have to compete with companies that have already sold their gas for the next 10 or 20 years.
He says projects like Inpex's $34 billion Ichthys venture in Darwin and off the coast of Western Australia face much higher costs than others did a decade ago.
"The cost of drilling equipment has gone up substantially, so instead of paying, say, $200,000 a day for a drilling rig, you are now paying $550,000 a day," he said.
"The cost of putting pipe in the ground has doubled or tripled, so all of those engineering costs have also gone up."
Mr Strachan says new projects will also have to grapple with high labour costs.
"Wage costs in Australia are probably double what might be expected in parts of North America and would probably be 10 times higher than the costs associated with labour that would be typical in a project offshore in East Africa," he said.
http://www.abc.net.a...id-boom/3790046
Peter Strachan says any new projects are going to have to compete with companies that have already sold their gas for the next 10 or 20 years.
He says projects like Inpex's $34 billion Ichthys venture in Darwin and off the coast of Western Australia face much higher costs than others did a decade ago.
"The cost of drilling equipment has gone up substantially, so instead of paying, say, $200,000 a day for a drilling rig, you are now paying $550,000 a day," he said.
"The cost of putting pipe in the ground has doubled or tripled, so all of those engineering costs have also gone up."
Mr Strachan says new projects will also have to grapple with high labour costs.
"Wage costs in Australia are probably double what might be expected in parts of North America and would probably be 10 times higher than the costs associated with labour that would be typical in a project offshore in East Africa," he said.
http://www.abc.net.a...id-boom/3790046
here's one for you tom
