Wednesday, March 6, 2013

Analysis: James Price Point ... dead before dying | WA Business News

Analysis: James Price Point ... dead before dying | WA Business News:
Political and environmental pressure on the state government, whichever side wins on Saturday, will have no effect on the future of the onshore gas processing centre proposed for James Price Point in the Kimberley – the global gas glut has already killed it.

No-one in government will admit that is the case but you only have to look at what’s been happening in Japan and the U.S. to see the problem for all Australian gas-export projects.

In a few words, Australia has priced itself out of the market with a domestic cost structure that is amongst the highest in the world, just as the price of globally-traded LNG starts to fall.

That’s why companies proposing to develop LNG projects off the WA coast are shelving plans drawn up over the past few years and casting around for cheaper options, with the current leader being floating barge technology of the sort Shell is building for its Prelude gas deposit off the Kimberley coast.


  1. Spill in China Underlines Environmental Concerns

    The results of an official investigation into the Tianji spill were announced on Feb. 20 by Xinhua, the state news agency, which reported that a faulty hose had resulted in the leakage of about 39 tons of aniline, a potential carcinogen, from the fertilizer factory. Thirty tons were contained by a reservoir, but nearly nine tons leaked into the Zhuozhang River, which feeds into the Zhang River that runs to Hebei Province, where Handan is, and Henan Province.


    After sending a team to Handan in January, Greenpeace East Asia issued a report on the spill. It said that there were about 100 coal-to-chemical factories on the upper reaches of the Zhuozhang River. “There is a history of clashes between heavily water-consuming coal-to-chemical factories and citizens downstream who are trying to compete for water to drink,” the report said. Larger factories like those of Tianji use 2,000 to 3,000 tons of water per hour, equivalent to the amount of water that more than 300,000 people use in a year.

    The factory in Changzhi dumps more than six million tons of wastewater per year, about 30 percent of the water taken from the river, according to Greenpeace. The wastewater is supposed to drain into a receptacle.

    Greenpeace said Tianji is “notorious for its pollution.” In 2010 and 2011, Tianji had been judged by Shanxi’s environmental protection bureau to be polluting above normal levels in four quarters and was fined each time. Tianji’s pollution was abnormally high throughout most of 2011, so provincial officials asked the Changzhi environmental protection bureau to monitor the factory, Greenpeace reported.


    In 2011, inspections in 200 cities across China found that water in 55 percent of the tests was rated “fairly poor to extremely poor,” Mr. Yan said. Zhang Lei, an associate professor of environmental studies at Renmin University in Beijing, said that her research showed that there had been about 3,600 spillage accidents related to the chemical industry from 1970 to 2010, of which about 900 were on a large scale.



    China Daily reported that Shaanxi Coal and Chemical Industry Group Co Limited, a large state owned energy and coal chemical company, plans to invest in an Australian coal mine.

    Mr Hua Wei group chairman of Shaanxi Coal and Chemical Industry Group Co Limited said that “We are currently conducting geological exploration in the coal mine in Australia.”

    The investment will be carried out with other energy companies based in Northwest China’s Shaanxi province.



    KBR Awarded Contract by Tianji Coal Chemical Industry Group Co., Ltd. for Grassroots Aniline Plant

    Houston, Texas — January 25, 2011 — KBR (NYSE: KBR) today announced that its Technology business unit has been awarded a contract by Tianji Coal Chemical Industry Group, Co., Ltd. (Tianji) to provide licensing and related engineering services for a grassroots aniline plant to be located in Lucheng, Shanxi, China.

    The aniline technology is offered by KBR through a licensing alliance with DuPont. KBR will license this leading technology, and provide basic engineering and field support services, for Tianji’s 450 metric tons per day (MTPD) aniline plant. This award follows the successful licensing by KBR of an existing 150,000 MTA aniline plant for Tianji in China.

    “This award reinforces KBR’s position as the leading supplier of technology for aniline production, particularly for the new world-scale plants in the region,” said Tim Challand, President, KBR Technology. “The contract award is also a significant one for KBR as it marks the fifth aniline license in China, demonstrating that major aniline producers in the region recognize the technology’s superior performance, safety, reliability and value.”





    Massive algal bloom stirred up by Rusty

    THE impact of ex-cyclone Rusty is still being felt off the coast of Western Australia, with scientists reporting an algal bloom the size of Tasmania stirred up by the monster storm.

    The residents of Port Hedland may have been largely spared the wrath of Rusty as the category four cyclone crossed the northwest coast last week but the surrounding environment has been severely affected.

    Professor Charitha Pattiaratchi from The University of Western Australia says Rusty has stirred up the ocean off WA like no other weather pattern.

    Nutrients stirred up from the sea floor have resulted in a massive bloom, estimated to be as big as Tasmania, of microscopic plants called phytoplankton.

    Prof Pattiaratchi said since Rusty's passage, the ocean's turbidity levels had exceeded the maximum range of measurement instruments, including a remote-controlled underwater glider that travels from Broome towards Scott Reef, about 200km offshore.

    "Turbidity is caused by the action of both waves and currents, and the data collected shows that the speed of the ocean currents almost doubled."

    "The glider gives us an opportunity to collect data under extreme conditions. We couldn't have done it otherwise."



  3. The news this morning sinks JPP again.
    Does this sink Oakajee?
    Or for that matter Point Torment?

    Storm warning: extra production no guarantee against price plunge

    THE recent storms that swept across the Pilbara were nothing compared to the tempest that is coming for the iron ore producers in the region. That the lockdown for the coming tempest has already begun is reflected in the savage treatment dished out to the Pilbara iron ore producers, both big and small, since Valentine's Day.

    Rio Tinto has plunged 11 per cent while BHP Billiton, with its more diversified operating base, is down a still uncomfortable 8 per cent. Andrew Forrest's Fortescue has taken an 18 per cent hit, which is pretty bad until you take a look at the 24 per cent crunch for Mount Gibson, and the 27 per cent plunge for Atlas.

    Somewhat amazingly, all that has happened while the iron ore price has remained remarkably strong at more than $US150 a tonne. But as the sell-down in iron ore stocks tells us, no one expects iron ore to hold on to these levels much longer.

    The consensus is that there will be a December-half retreat in iron ore prices as the restocking in China passes and new production hits the market in a big way. Most analysts are huddled together with forecasts around the $US110-$US120 a tonne level by calendar year end. But there are outliers with forecasts of $US70 a tonne.

    It would be really nice to know who is right. Apart from the $US17 billion annual revenue hit that a fall to $US120 a tonne alone would entail, there is the nastier thought of a $US45bn annual revenue hit should the uglier prediction of a fall to $US70 a tonne come to pass.

    Now there are smarties who will tell you this was all meant to happen, and that there is nothing to worry about because volumes are rising, offsetting price falls.

    They have got to be kidding. Yes, Pilbara output is headed from the current annual rate of 560 million tonnes to about the 700 million-tonne mark from 2015. It is one of the key reasons iron ore is tipped to lose its high-flying status. But don't think for a moment that the extra production will offset the earnings crunch that a fall to $US120 a tonne, or $US70 a tonne, will cause.

    The market has anticipated that, which is why the Pilbara producers are as battered as they are, even if at sub-$US120 a tonne, cash margins can be pretty good, particularly for Rio and BHP, and Fortescue once it gets from its current annual run rate of 100 million tonnes to the planned 155 million rate by (calendar) year end.

    Work by Deutsche, based on figures from the producers in the December half, showed that at the December price average of $US114 a tonne -- yep, remember iron ore sank to $US87 a tonne only last September -- Rio enjoyed a cash margin of about $US73 a tonne. BHP was at $US70 a tonne and Fortescue was all of $US13.60 a tonne, but changing for the better as mentioned.

    There are not too many businesses out there enjoying cash margins of more than 60 per cent (Rio and BHP), remembering this is based on a $US114-a-tonne iron ore price average in the December half. So the question investors need to ask is if the selloff has been overdone? Should prices retreat in the December half to no less than $US114 a tonne, the answer would be a clear yes. But all bets are off if iron falls below $US100 a tonne.

    As for the iron ore explorers, the least said the better.


  4. I'm not sick: Barnett

    Colin Barnett has sensationally confronted election eve speculation about his health and suggestions from within his party that he struck a "Kirribilli deal" with Troy Buswell in 2008 to hand back the Liberal leadership.
    A day after Labor leader Mark McGowan claimed the Premier would not serve a full term and would instead hand power to the Treasurer, Mr Barnett attacked whispers from across the political divide suggesting his health was in decline.

    "I don't know who's spinning you this bulls… that I'm tired, I'm sick, Kirribilli deals," Mr Barnett said.

    "I mean, someone is just spinning you bull."
    Asked about Mr McGowan's claim yesterday, a Liberal backbencher recalled rumours that Mr Buswell relinquished the leadership in 2008 on the understanding he would get it back when he recovered from the infamous chair-sniffing episode.
    Mr Barnett phoned and declared he was in good health, scoffing at observations from his side of politics that his left eye appeared to droop during the leaders' televised debate last month.

    "A droopy eye? Oh come on, mate, this is just ridiculous," he said.


    He is sick from lieing too much and messing around where he shouldn't.
    And he has got a droopy eye.

    The Premier also dismissed comments made by his Nationals partner Brendon Grylls.

    Mr Grylls told a national newspaper that money pledged, by both major parties, for a rail line to the airport would be better spent on improving facilities in regional towns.

    Mr Barnett says the line is the most important way of making life easier for fly-in fly-out workers.


    “FIFO workers are modern day heroes,” Mr Barnett said in the final week of the State election campaign.

    “They do separate from their families, they do put up with some loss of amenity, they work in harsh conditions, for long hours, doing exciting work.

    “They deserve more respect, and not to be treated like some scourge of the earth.”


    Transport officials called an urgent meeting with the City of Swan in January because a Government announcement on a rapid bus transit service to Ellenbrook was imminent, according to Swan mayor Charlie Zannino.

    Cr Zannino said yesterday "you could have knocked me over with a feather" after reading in The West Australian that Premier Colin Barnett refused to commit to the project.

    Cr Zannino said he had verbal commitments from Liberal MLA for Swan Hills Frank Alban and Transport Minister Troy Buswell about the rapid bus service to Ellenbrook.

    A letter from Mr Alban to Ellenbrook residents in January said the project was "under way".

    However, Mr Buswell said that without knowing the final cost, it would be "highly irresponsible to make an open-ended funding commitment".

    Cr Zannino predicted a voter backlash over the rapid bus service.

    "The community would be thinking they've been short-changed," he said.

    Mr Barnett said he would not commit to funding the bus service in the next four years.


    Mr McGowan says he stands by his argument that the Treasurer Troy Buswell would eventually take over from Mr Barnett if the Liberals win the election.


    Mr Barnett said rather than clamp down on foreign workers who were willing to come to Australia to fill the positions, the Government should be asking why more Australians were not willing to move where the high-paid work was.

    “They (457 visas) are essential for WA in particular and we have been a big employer of 457 workers, and they go across a who lot of areas, trades, engineers, a whole scope of works,” Mr Barnett said.

    “I think it is a pity that in Australia more people with those skills aren’t prepared to come to WA and aren’t prepared to go into the Pilbara and take on these demanding, challenging, exciting jobs which are highly paid.

    “That is one of the weaknesses of the Australian economy.”