Australia, the US and Qatar are safe and secure investment destinations, right? They had better be, since by 2030 they could account for 70 per cent of global liquefied natural gas exports, up from 61 per cent today.
However, recent events down under should make LNG customers beware.
On Wednesday, workers at the North West Shelf LNG plant in Western Australia voted 99 per cent in favour of industrial action. Employees of Woodside Energy and Chevron at the Wheatstone and Gorgon facilities are bargaining and could also decide to strike. In the face of higher inflation, they want pay rises, and guarantees that contractors will not take some of their workload.
A two-month pay dispute last year shut down Shell’s Prelude floating LNG plant, which had earlier suffered lengthy technical problems. The Columbia Centre on Global Energy Policy notes that North West Shelf, Wheatstone and Gorgon together account for about 10.5 per cent of global LNG exports, so a similar halt would seriously dent gas markets.
Depending on the vote, personnel would probably down tools towards the end of this month. The Labour government is broadly supportive of the trade unions. But it also has to support its European and Asian allies at a time of great geopolitical delicacy.
What happens in the Pacific will not stay there.
Europe buys hardly any LNG from Australia, because of the long transport distance. But to replace any Australian shortfall, Japan, China and others will buy flexible LNG from the US, diverting it from Europe.
European gas prices jumped 40 per cent overnight on Wednesday to a two-month high on news of the strikes, before giving up some gains on Thursday. Europe’s gas storage is almost full today, but it still needs large LNG imports during winter.
Of course, a deal may be reached soon. Nevertheless, leaving aside the specifics of labour relations, it is dangerous to rely too heavily for a crucial commodity on just three suppliers, however good their track records.
Australian labour discontent might be a short-lived or episodic phenomenon.
However, in March, Takayuki Ueda, chief executive of Inpex, a leading Japanese oil and gas company, warned his hosts at the Australian parliament in Canberra that their country was “quietly quitting” the LNG business. Japan gets 40 per cent of its gas from Australia, so it is naturally concerned.
A study by the Oxford Institute for Energy Studies finds that longer-term Australian LNG output is threatened by a dearth of new projects and gradual declines in reserves. Exploration for new gas and progress on LNG ventures have dwindled in the face of environmentalist and community opposition, lengthy timelines and complex regulation, and high labour costs.
Gas prices in eastern Australia have soared because of inadequate new supply, and the government has consequently introduced a price cap and considered restricting LNG exports, which would dent the country’s reputation for reliability.
Canberra has also upset investors and Japanese customers by introducing new limits on greenhouse gas emissions, including for projects in the middle of development.
The other two leading global LNG players present their own risks.
Qatar has a perfect history as a reliable supplier, but it shares its major gasfield with Iran, and nearly all its exports have to pass through the Strait of Hormuz. It is also not a flexible seller, preferring long-term contracts with fixed delivery destinations.
This makes the US the most adaptable large LNG exporter. It benefits from an entrepreneurial mindset, gas feedstock supply from a huge variety of onshore fields, and the presence of several competing exporting companies.
However, in June last year, the Freeport LNG plant, one of the US’s largest, suffered a serious accidental explosion, just as Russia’s war in Ukraine was sending global prices soaring. The facility fully restarted only in March. Nearly all American LNG export facilities are lined up along the Gulf of Mexico coast, exposed to hurricanes and storm surges as the world heats up and sea-levels swell.
A less serious but curious problem surrounds the Venture Global plant at Calcasieu Pass in Louisiana, which has sent out more than 170 cargoes, yet failed to supply Shell, BP and others under long-term contracts, claiming its power supply requires repairs. Its customers suspect it was choosing instead to sell on the higher-priced spot market.
However, it is domestic politics that could pose the biggest risk to future US LNG exports. The Democratic Party is under increasing pressure from its left wing to crack down on the fossil fuel industry, so future projects may face growing opposition. If new drilling is constrained and domestic gas prices soared, complaining consumers and industries might seek to limit exports. And a Democratic or Republican White House might restrict supplies to a geopolitical adversary, notably China.
Unlike Opec in oil, no country holds substantial spare LNG production capacity.
Russian gas through pipelines used to play the balancing role for Europe, but that is now kaput. Russia itself also accounts for about 7.5 per cent of world LNG supply, but there is increasing talk about banning that too from Europe, and sanctions and lack of finance and technology access will impede future planned supply from the Russian Arctic and Far East.
This creates an opportunity for new LNG players to ensure diverse and reliable supplies.
Adnoc is developing a new export facility at Ruwais in Abu Dhabi’s western region, and Canada one in British Columbia, an easy sail to Japan.
Some entrants are riskier: the East Mediterranean, with its complex and combustible politics; Mozambique, with a recent Islamist insurgency around the proposed facility in its north, Tanzania, a project revived after years of delay by government inertia; Mauritania and Senegal.
Greater supply diversity, even from tricky locations, improves overall energy security.
Western LNG importing countries are very averse to funding new fossil fuel projects. But they should at least support African LNG plants, in combination with stringent greenhouse gas limits. The alternative is a turn back to secure but much dirtier coal, both in Europe and Asia.
European governments used to tremble before the coal unions; now they need to ease worries over gas labour activists on the other side of the world.
Robin M. Mills is chief executive of Qamar Energy and author of 'The Myth of the Oil Crisis'
UAE currency: the story behind the money in your pockets
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Pharaoh's curse
British aristocrat Lord Carnarvon, who funded the expedition to find the Tutankhamun tomb, died in a Cairo hotel four months after the crypt was opened.
He had been in poor health for many years after a car crash, and a mosquito bite made worse by a shaving cut led to blood poisoning and pneumonia.
Reports at the time said Lord Carnarvon suffered from “pain as the inflammation affected the nasal passages and eyes”.
Decades later, scientists contended he had died of aspergillosis after inhaling spores of the fungus aspergillus in the tomb, which can lie dormant for months. The fact several others who entered were also found dead withiin a short time led to the myth of the curse.
The specs: 2018 Mercedes-AMG C63 S Cabriolet
Price, base: Dh429,090
Engine 4.0-litre twin-turbo V8
Transmission Seven-speed automatic
Power 510hp @ 5,500rpm
Torque 700Nm @ 1,750rpm
Fuel economy, combined 9.2L / 100km
KILLING OF QASSEM SULEIMANI
Specs
Engine: Electric motor generating 54.2kWh (Cooper SE and Aceman SE), 64.6kW (Countryman All4 SE)
Power: 218hp (Cooper and Aceman), 313hp (Countryman)
Torque: 330Nm (Cooper and Aceman), 494Nm (Countryman)
On sale: Now
Price: From Dh158,000 (Cooper), Dh168,000 (Aceman), Dh190,000 (Countryman)
MATCH INFO
Barcelona 2
Suarez (10'), Messi (52')
Real Madrid 2
Ronaldo (14'), Bale (72')
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Expert input
If you had all the money in the world, what’s the one sneaker you would buy or create?
“There are a few shoes that have ‘grail’ status for me. But the one I have always wanted is the Nike x Patta x Parra Air Max 1 - Cherrywood. To get a pair in my size brand new is would cost me between Dh8,000 and Dh 10,000.” Jack Brett
“If I had all the money, I would approach Nike and ask them to do my own Air Force 1, that’s one of my dreams.” Yaseen Benchouche
“There’s nothing out there yet that I’d pay an insane amount for, but I’d love to create my own shoe with Tinker Hatfield and Jordan.” Joshua Cox
“I think I’d buy a defunct footwear brand; I’d like the challenge of reinterpreting a brand’s history and changing options.” Kris Balerite
“I’d stir up a creative collaboration with designers Martin Margiela of the mixed patchwork sneakers, and Yohji Yamamoto.” Hussain Moloobhoy
“If I had all the money in the world, I’d live somewhere where I’d never have to wear shoes again.” Raj Malhotra
Tearful appearance
Chancellor Rachel Reeves set markets on edge as she appeared visibly distraught in parliament on Wednesday.
Legislative setbacks for the government have blown a new hole in the budgetary calculations at a time when the deficit is stubbornly large and the economy is struggling to grow.
She appeared with Keir Starmer on Thursday and the pair embraced, but he had failed to give her his backing as she cried a day earlier.
A spokesman said her upset demeanour was due to a personal matter.
Moral education needed in a 'rapidly changing world'
Moral education lessons for young people is needed in a rapidly changing world, the head of the programme said.
Alanood Al Kaabi, head of programmes at the Education Affairs Office of the Crown Price Court - Abu Dhabi, said: "The Crown Price Court is fully behind this initiative and have already seen the curriculum succeed in empowering young people and providing them with the necessary tools to succeed in building the future of the nation at all levels.
"Moral education touches on every aspect and subject that children engage in.
"It is not just limited to science or maths but it is involved in all subjects and it is helping children to adapt to integral moral practises.
"The moral education programme has been designed to develop children holistically in a world being rapidly transformed by technology and globalisation."
THE SPECS
Engine: 1.5-litre, four-cylinder turbo
Transmission: seven-speed dual clutch automatic
Power: 169bhp
Torque: 250Nm
Price: Dh54,500
On sale: now
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Squads
India: Kohli (c), Rahul, Shaw, Agarwal, Pujara, Rahane, Vihari, Pant (wk), Ashwin, Jadeja, Kuldeep, Shami, Umesh, Siraj, Thakur
West Indies: Holder (c), Ambris, Bishoo, Brathwaite, Chase, Dowrich (wk), Gabriel, Hamilton, Hetmyer, Hope, Lewis, Paul, Powell, Roach, Warrican, Joseph
Company profile
Date started: 2015
Founder: John Tsioris and Ioanna Angelidaki
Based: Dubai
Sector: Online grocery delivery
Staff: 200
Funding: Undisclosed, but investors include the Jabbar Internet Group and Venture Friends
F1 The Movie
Starring: Brad Pitt, Damson Idris, Kerry Condon, Javier Bardem
Director: Joseph Kosinski
Rating: 4/5
The five pillars of Islam
It Was Just an Accident
Director: Jafar Panahi
Stars: Vahid Mobasseri, Mariam Afshari, Ebrahim Azizi, Hadis Pakbaten, Majid Panahi, Mohamad Ali Elyasmehr
Rating: 4/5
UAE currency: the story behind the money in your pockets
The specs
- Engine: 3.9-litre twin-turbo V8
- Power: 640hp
- Torque: 760nm
- On sale: 2026
- Price: Not announced yet
Company profile
Name: Tratok Portal
Founded: 2017
Based: UAE
Sector: Travel & tourism
Size: 36 employees
Funding: Privately funded
LAST-16 EUROPA LEAGUE FIXTURES
Wednesday (Kick-offs UAE)
FC Copenhagen (0) v Istanbul Basaksehir (1) 8.55pm
Shakhtar Donetsk (2) v Wolfsburg (1) 8.55pm
Inter Milan v Getafe (one leg only) 11pm
Manchester United (5) v LASK (0) 11pm
Thursday
Bayer Leverkusen (3) v Rangers (1) 8.55pm
Sevilla v Roma (one leg only) 8.55pm
FC Basel (3) v Eintracht Frankfurt (0) 11pm
Wolves (1) Olympiakos (1) 11pm