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Santos deal puts Gorgon in the shade

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27 August 2009 12:54

What's the biggest LNG export deal Australia has signed with an Asian state-owned oil and gas company? If you have been following the Australian and global news lately you would probably plump for the recent Gorgon deal signed between Exxon Mobil and PetroChina. If one is a keen follower of press releases from Australia's Minister for Resources and Energy, one would also think this.

Yet, bizarrely, under the radar and without a ministerial press release, Australian oil and gas company Santos has partnered with Malaysia's Petronas to supply more LNG to Malaysia than Exxon is signed up to provide PetroChina. This elephant-in-the-room LNG deal with Malaysia, which was announced to the ASX more than two months ago, is not only noteworthy for its massive size, it also heralds a growing diversification of our LNG exports away from traditional Northeast Asian markets.

Just as Australian energy exports have been a key strategic asset in Australia’s relations with Japan, South Korea, Taiwan, the PRC and now India, it looks like they could play a similar role in Southeast Asia.

Malaysia’s Petronas (Malaysia’s largest company) has traditionally been an LNG export competitor of Australia; now it will become one of the largest buyers. It seems Australia's present fixation on the People's Republic of China means we can miss very large developments much closer to home. 

Photo by Flickr user Gaelle CLOAREC, used under a Creative Commons license.

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