Australia secures funding For 150 MW solar power station

Australia has secured funding to build an A$923 million ($981.5 million) 150-megawatt solar power station, one of the world’s largest, government ministers said on June 18.

 

The Moree Solar Farm will be built near Moree in the north of New South West state and is expected to generate more than 400 gigawatt hours of electricity a year, capable of running 45,000 homes, state and federal officials said in a statement.

 

The project involves constructing a power plant and transmission line that will link the plant to the electricity grid. About 650,000 solar panels will cover an area of 1,100 hectares, and will be built in stages and expanded over five years to 150 MW capacity.

 

“The solar project will be the largest of its type, I am advised, in the world,” said Kevin Humphries, minister for Western New South Wales.

 

The state government said it will contribute up to A$120 million toward construction, which was awarded to BP PLC’s (BP) BP Solar unit, Fotowatia and Pacific Hydro, and the federal government will contribute A$306.5 million. It said another A$66.5 million will be provided by the Commonwealth government to state research institutions for solar research. The three companies will make up the remainder of the spending on the project, it said.

 

According to BP Solar, capital expenditure on the plant will be between A$600 million and A$700 million and construction is expected to create 300-400 direct jobs, the state government said.

 

Gas project off Western Australia highlights rivalry for LNG crown

Far across the Indian Ocean, Royal Dutch Shell has given the go-ahead to a gas project that could intensify the growing rivalry between Qatar and Australia for the title of the world’s leading natural gas liquids exporter.

 

The crown that is now the Gulf emirate’s could be snatched away within the next few years, predicts Colin Barnett, the premier of Western Australia.

 

“We are closing on Qatar’s position,” he said at a business lunch this month in Abu Dhabi. “I expect Western Australian LNG exports to triple to 160 million tonnes per annum by the end of the decade.”

 

That would be more than double Qatar’s current export capacity of 77 million tonnes per year of the super-chilled fuel.

 

“It will be interesting to see by 2020 whether Qatar or Australia will be the leading LNG producer,” Mr Barnett added. “For sure they will be numbers one and two.”

 

Shell’s Prelude project in Australia, with an estimated capital cost of US$11.5 billion (Dh42.23bn), will be the world’s first floating LNG production plant.

 

Announcing the final investment decision last month, the company said the facility would be the largest floating structure in the world, longer than four football fields and weighing six times as much as the largest aircraft carrier.

 

“Floating LNG will change the rules of the game,” said Malcolm Brinded, the director of international oil and gas exploration and production at Shell. “It will allow us to access stranded offshore gasfields that otherwise would be too costly or too difficult to develop,” he said.

 

The Prelude gasfield lies 200km off the northern coast of Western Australia. When the floating gas plant, to be built in a South Korean shipyard, is up and running, it will have a annual output capacity of 3.6 million tonnes of LNG, 1.3 million tonnes of condensate, a type of light oil, and 400,000 tonnes of LNG.

 

Shell has approved Prelude as more than a dozen large LNG projects are under way or nearing final investment decisions off the coast of Australia and Papua New Guinea. They include the A$43bn (Dh167.71bn) Gorgon project led by Chevron, and the $15bn PNG LNG project led by ExxonMobil, in which Abu Dhabi’s International Petroleum Investment Company holds an indirect interest through its stake in the Papua New Guinea company Oil Search.

 

Shell said it expected its investments in Australia’s burgeoning offshore oil and gas sector to reach $30bn in the next five years. That includes stakes in Gorgon and at least four other gas projects that are under development.

 

The new Australasian gas projects are targeting fast-expanding Asian energy markets. Those include countries to which Qatar already sells much of its LNG.

 

Australia ready to ink $11.6 bln deal with Telstra

The deal between Telstra and the state-owned National Broadband Network (NBN) is worth A$11 billion ($11.6 billion) to the former phone monopoly and is due to be discussed by the Telstra board on June 1, the Australian Financial Review said, without citing sources.

 

The NBN, Australia’s biggest infrastructure project in decades, aims to bring high-speed internet access to over 90 percent of households.

 

It was a key plank of Gillard’s re-election campaign last year. Australia, with its vast distances and rugged terrain, has relatively slow and expensive telecoms infrastructure.

 

As part of the deal, the government will pay A$9 billion to Telstra for around 100,000 km of duct space, 10,000 storage racks in telephone exchanges, and some unused fibre, the Review said. In addition, the government would pay A$2 billion for Telstra to hand over its universal service obligation, it added.

 

In a separate deal, the government is also set to pay up to A$1 billion to Singapore Telecom-owned Optus to shut down its cable network and not compete with NBN, the Review said.

 

Australia’s Qantas cancels orders, trims targets

Australian carrier Qantas scaled back growth plans and cancelled aircraft orders on June 15 in response to slowing domestic demand, as it grapples with high fuel costs and natural disasters.

 

Chief executive Alan Joyce said the airline was now eyeing 5.5 percent domestic capacity growth for 2011-12, compared with eight percent previously.

 

Spending will be slashed by A$400 million (US$426 million) – A$100 million from the second half of the current financial year, which ends this month, and A$300 million from 2011/12.

 

Aircraft lease plans will be reduced by A$300 million, added Joyce, with Qantas now expecting to take delivery of 34 aircraft in 2011-12 instead of the 43 previously announced.

 

Orders for 12 narrow-body jets will be cancelled or deferred, including three anticipated in the second half of this year.

 

Qantas has already warned it is planning slash capacity and jobs – mostly management positions – in response to a string of natural disasters and record jet fuel prices.

 

“The Qantas Group has always taken decisive action to match capacity to demand,” said Joyce in a statement on June 15, citing “slower overall growth rates in the domestic market”.

 

“We are well-placed to retain our profit-maximizing 65 percent domestic market share.”

 

The announcement comes as an ash plume from Chile’s Puyehue volcano wreaks travel chaos in Australia and New Zealand, forcing widespread flight cancellations and delays that have stranded thousands of travellers.

 

The airline suffered about A$80 million in losses due to flooding and cyclones in Australia earlier this year, followed by an A$15 million hit from New Zealand’s Christchurch earthquake.

 

The deadly tremor and tsunami in Japan wiped another A$45 million from the books.

 

And a mid-air engine explosion over Indonesia last November forced it to temporarily ground its entire A380 superjumbo fleet at a cost of A$80 million in the current financial year.

 

The Australian dollar’s bullish run above parity with the greenback has also hit inbound international travel and seen a slump in the domestic market, as Australians seek cheaper holidays offshore.

 

Internally, Qantas is facing a damaging industrial row, with thousands of engineers, pilots and other staff threatening to walk off the job over fraught wage negotiations.

 

However, the “Flying Kangaroo” posted a four-fold increase in first-half net profit in February to A$241 million, saying the “general operating environment continues to improve.”

 

It estimated that before-tax profits for the financial year ending in June would be “materially stronger” than the 2010 figure of A$377 million.

 

Australia consumer sentiment falls to 2-year low

The survey of 1,200 people by Westpac Bank (WBC.AX) and the Melbourne Institute released on June 15 showed its index of consumer sentiment fell 2.6 percent to 101.2, on top of a 1.3 percent drop in May. This left the index down 0.6 percent on June last year.

 

Among news most recalled by respondents were economic conditions and taxes, with news on unemployment rated as the most “unfavorable.”

 

The survey was taken in a week when government data showed employment rose by far less than expected in May, while full-time employment fell for a second month.

 

Households also seemed unnerved by the Labor government’s plans for a carbon tax, and found little relief in the Reserve Bank of Australia’s (RBA) decision to leave interest rates on hold for a seventh straight month.

 

“It appears that despite steady interest rates and falling petrol prices concerns about the introduction of a price on carbon are rattling households,” said Westpac chief economist Bill Evans.

 

The caution of consumers is one reason markets have priced out much chance of a rise in interest rates for the remainder of the year.

 

Of the five components of the sentiment index, the largest decrease of 6.2 percent came in that reflecting economic conditions next 12 months. The index of conditions for the next five years dropped 3.7 percent while that for family finances compared to a year ago eased by 2.0 percent.

 

The only measure to rise was that for family finances for the next 12 months which edged up by 1.1 percent.

 

In a negative sign for retailers, the measure of whether it was a good or bad time to buy a major household item also fell 2.1 percent in June, though it was still up over 10 percent on this time last year.

 

Overall, the expectations index fell by 3.1 percent to 97.4, and the current condition index declined by 2.1 percent to 106.9.

 

The survey also showed a further shift in preferences toward low risk investments. The proportion of respondents who nominated bank deposits as the wisest form of savings rose to 32 percent in June, from 27.1 percent in March.

 

Likewise, the proportion nominating “pay down debt” as the wisest place for savings rose to 23.9 percent, from 22.6 percent.