The Inaugural Australia and China LNG Forum
Thursday 21 September 2017, Hyatt Regency Perth 99 Adelaide Terrace, Perth, Western Australia 6004
With Australia on track to become the world’s largest LNG exporter and China hailed as the fastest-growing major LNG market, the inaugural Australia and China LNG Forum has established itself as a landmark first-of-a-kind event gathering leaders from both nations to discuss major themes in the ever-evolving LNG trade relationship between the two nations.
The West Australian Minister for Small Business; Defence Issues; Citizenship and Multicultural interests; the Hon. Paul Papalia, MLA, represented the WA Premier and officially opened the event. In addition, the Minister for Mines and Petroleum; Commerce and Industrial Relations; Electoral Affairs; Asian Engagement, the Hon. Bill Johnston MLA delivered one of the forum’s keynote speeches. As the bilateral counterpart of the West Australian govnerment, the Consulate General of the People’s Republic of China in Perth, officially represented by the Economic and Commercial Consul, Mr. Wei Liang, delivered a forerunning speech during the proceedings.
The day program included presentations by leaders and experts from LNG industry, government as well as companies from the engineering services, consulting, banking and legal sectors. The event attracted over one hundred attendees from various Australian, Chinese and Multinational LNG related enterprises. Presentation topics varied from LNG market analysis, financing and contracting considerations for LNG investments, to advice on relevant legal and regulatory frameworks. Mr. Weiping Hu, regarded as the chief architect of China’s LNG industry, currently the President of China Overseas Development Association, delivered a keynote address on China’s LNG policy and demand. Mr. David Cullen, President of China Administration Company, North West Shelf Joint Venture Project, gave a keynote address on the past, present and future Australia and China LNG collaboration. Mr. Yongfeng Lu, Managing Director of CNOOC Australia International Holdings, highlighted the role of Chinese companies in the Australian LNG sector. Although the topics presented were diverse, some common themes were clearly prevalent.
A key conclusion from the event was an extremely confident and optimistic future outlook for LNG trade between Australia and China, presenting an abundance of collaboration opportunities for enterprises involved in the sector. This outcome is largely due to the matching of supply and demand: China’s demand for LNG is expected to grow rapidly over the next 10 to 15 years whilst, with opportune timing, Australia’s capacity to supply LNG is also predicted to increase considerably. Australia’s geographic proximity to China, its common time zone and political and economic stability ideally positions Australia at the forefront of LNG suppliers competing for China’s growing demand. It is also highly advantageous that solid foundations have already been laid for LNG trade between Australia and China, with China having invested in a multitude of Australian natural gas projects since the late 1990s. China also recently introduced new LNG policy to encourage the private sector to play a role in LNG import and distribution. A number of new Chinese LNG players have entered the market.
Whilst the presenters all agreed that the future is bright and it is evident China takes a serious interest in Australia’s LNG resources (with Australia having recently become China’s largest LNG supplier), there was also consensus that some major challenges exist and pose as potential road blocks to a successful trade relationship.
The first major challenge is the cost and time required to execute projects in Australia is far greater than that required in other LNG supplying countries. This factor significantly affects Australia’s competitiveness. Secondly, Australia’s complex regulatory and legal framework not only exacerbates cost and time issues, but also steepens the learning curve when doing business with Australia. Furthermore, both Australia and China have a lot to learn about each other, including each country’s market requirements, culture and business practices. These challenges, amongst others, must be addressed in order to optimise the LNG trade relationship between the two nations.
The forum was organized by the Western Australian Chinese Petroleum Association (WACPA). Premier bilateral associations supporting the event included the China Overseas Development Association (CODA), the Australia China Business Council (ACBC) Western Australia and the China Chamber of Commerce in Australia (CCCA). As a result of the overwhelming success of the inaugural event, the WACPA plans to organise the forum on an annual basis.
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Executive Chair of Corporate Membership
Western Australian Chinese Petroleum Association
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