Taiwan Courts Australia For Deals On Commodities
Sydney Morning Herald
Saturday March 1, 2008
THE Taiwanese Government is encouraging companies to take part in more joint ventures in resources projects in Australia as it competes with regional neighbours like China, Japan and Korea to secure supplies of scarce commodities.
Taiwan's Minister for Economic Affairs, Steve Chen, told the Herald yesterday that his Government was willing to help companies finance purchases of stakes in Australian resources projects. Taiwan Power, a state-owned utility, already owns 10 per cent of Rio Tinto's Bengalla mine in the Hunter Valley, and Mr Chen said he would encourage similar deals to help secure supplies of commodities like coal, gas, uranium and iron ore. Wenent Pan, the chairman of Taiwan's state-owned energy company, CPC, said yesterday his company was interested in buying a stake in the Woodside Petroleum-led Browse liquefied natural gas joint venture. Last year CPC struck a provisional contract to buy between 2 million and 3 million tonnes of LNG from Browse over 20 years, and Dr Pan attended a formal signing ceremony in Sydney yesterday. Woodside's chief executive, Don Voelte, indicated the joint venture was unlikely to sell down a stake to Browse's foundation customers, CPC and PetroChina."The current market supply demand doesn't force sellers to do that at this point," he said. "These are huge, huge projects. They are extremely costly. Frankly, you have to kind of keep all the equity you can to support that type of capital investment."Mr Chen said Taiwan's annual demand for LNG was expected to rise from 8.2 million tonnes last year to 16 million tonnes by 2020. Taiwan is Asia's third-largest buyer of LNG after Japan and Korea, but it has never signed a long-term supply contract with Australia before. Dr Pan said CPC was buying about a quarter of its LNG supply on the spot market, with some of those cargoes coming from Australia. CPC has long-term contracts with suppliers in Indonesia, Malaysia and Qatar and is attracted to Browse because of Australia's political stability. Last month Woodside said its Sunrise project might be built before the Browse project. Yesterday Mr Voelte said the provisional deal with CPC would allow flexibility in terms of which project would provide the gas. Dr Pan said he expected it would take another two years to negotiate the final terms. Taiwan needs the LNG for its expanding economy, which grew by 5.7 per cent last year. However Mr Chen warned that the growth rate was slowing because of a global economic downturn."My view is China will be suffering as well," he said. "We do see that some of the investors are planning to move out of China."
© 2008 Sydney Morning Herald