Sydney Indexes Gain; Pluto LNG Project Worries

Chandrasekhar Atreya
22 Oct, 2010
New York City

Australian shares traded sideways but gained marginally. A wind farm project in Victoria to generate 248 megawatts gets approval. BG Group and Santos win approval for the first project to extract natural gas from coal seams in Queensland.

[R]6:00 PM Sydney, Australia – Australian shares traded sideways but gained marginally. A wind farm project in Victoria to generate 248 megawatts gets approval. BG Group and Santos win approval for the first project to extract natural gas from coal seams in Queensland.[/R]

Australian stocks traded sideways pushing the benchmark index marginally higher led by miners and banks. ACCC and the Treasury cautioned four large banks for their financial service sector dominance.

The ASX 200 Index in Sydney gained 0.55% or 25.30 to close at 4,648.20. However, the index fell 0.87% or 40.8 in the week.

The Australian dollar closed at 97.78 U.S. cents sat close in Sydney today.

Woodside Petroleum said it is reviewing the cost and schedule of its $13 billion Pluto LNG project, raising concerns that there could be a delay in the targeted start-up date of the project. Woodside also confirmed that the flare stack at this project needs to be modified due to concerns over its cyclone proof rating.

Export prices of iron ore and coal increase for the second quarter in a row as Asian demand accelerated.

A 247.5 megawatt wind farm with 75 turbines that can produce sufficient energy to power more than 135,000 homes was approved for construction in western Victoria.

Planning Minister Justin Madden approved the A$326 million development at Ararat on Friday, subject to conditions. Community concerns about potential landscape and visual amenity and environmental impacts have been heard and appropriate conditions have been placed on the planning permits, Madden said in a statement.

New Hope confirmed having lodged its bidder’s statement for Queensland’s Northern Energy asking shareholders to consider risks and uncertainties associated with Northern Energy’s development pipeline.

Toyota’s total recall of 1.53 million Lexus, Avalon and other models for brake fluid related problems also includes 30,000 recalls in Australia. A Toyota spokesman said that no accidents have been linked to this defect.

Over, the past year, Toyota has recalled more than 10 million cars and trucks worldwide for a variety of problems like faulty gas pedals, braking problems etcetera.

A research conducted by the South Eastern Australian Climate Initiative on Friday highlights the effects of climate change on the Murray-Darling Basin’s water resources, which support 40% of Australian farmers. The research confirmed the 13-year drought was unprecedented and varied with yearly variability of rainfall and the changes can be linked to global warming making it the likely contributor to the recent drought.

Water Minister Tony Burke is waiting hear from experts on whether a process started under the Water Act, to cut human water use to restore the environment of the basin has paid enough regard to socio-economic effects.

Sydney Airport reported a 14.2% rise in earnings before interest, tax depreciation and amortization to A$567.4 million in the three quarters to September 30, on a revenue increase of 12.4% to A$692.9 million.

Further capacity additions are expected from Qantas Group, Singapore Airlines, Cathay Pacific, Malaysian Airlines, Garuda, China Southern, China Eastern, Air China and United Airlines.

Reform of the global financial services and an overhaul of the IMF will be the key issues on the agenda of Treasurer Wayne Swan at the G-20 Finance Minister’s meet starting today in Gyeongju in South Korea.

“The global economic recovery is patchy and uneven, and the risks remain to the downside, and of course the Australian economy will not be immune to these developments. A responsive, well resourced and properly representative IMF is crucial to the future stability and prosperity of the global economy,” Swan said.

AIA Group, the pan-Asian life insurer of AIG, is valued at $30.5 billion based on the higher pricing of its Hong Kong IPO price range.

Hong Kong’s largest IPO and could be world’s second-largest behind Agricultural Bank of China’s IPO, if over allotment is exercised. The pricing of HK$19.68, the top end of the range of HK$18.38 to HK$19.68, represents 1.32 times the 2010 embedded value and 15.9 times 2010 forecasted earnings, according to an analyst estimates.

BG Group Plc and Santos Ltd won Australia’s approval to build the first such project in the world that will convert natural gas from coal seams into liquid for overseas shipments.

The Queensland ventures, which together may cost more than A$30 billion received clearance from Environment Minister Tony Burke Friday, who said the approval is conditional on the companies complying with more than 300 conditions to protect the environment and prevent gas extraction from contaminating water.

Resource News

Mintails Ltd and West Wits Mining reached an agreement on the repayment of $1.95 million by Mintails to West Wits Mining for the obligations of the Emerald Gold project.

Anglo American’s metallurgical coal production during September was lower due to heavy rain in Queensland, according to the company’s third quarter production report.

Iluka Resources said it is in talks with major titanium feedstock customers over the allocation of production volumes in 2011, ahead of the upcoming expiration of existing supply contracts.

Austin Engineering extended its operations into the Hunter Valley coalmining region after acquiring Phillips Engineering.

Gainers & Losers

Paladin Energy Ltd led gainers in the ASX 200 with a gain of 5.76% to A$4.22 followed by Nufarm Ltd 5.57% to A$4.74, Elders Ltd 5.56% to A$0.665, Linc Energy Ltd 5.14% to A$1.945 and Extract Resources Ltd 4.17% to A$7.50.

Isoft Group Ltd led decliners in the index with a drop of 6.19% to A$0.091 followed by Lynas Corp Ltd 4.55% to A$1.68, Gunns Ltd 3.77% to A$0.765, St Barbara Ltd 3.75% to A$0.385 and Eldorado Gold Corp 3.64% to A$16.94.