Liquid Natural Gas: The Next Resource Boom?
Australia is on its way to becoming to natural gas what the Middle East is to oil. This could become Australia’s biggest resource boom yet.
Asia is the fastest growing market for liquid natural gas (LNG). Currently, Japan is the largest buyer. Japan and South Korea together make up 53% of current global regasification capacity. (That is, the ability to import LNG and turn it back into a gas for consumer and industrial use.) But demand elsewhere in Asia is catching up:
So how will the market meet this surge in Asian demand? That’s where LNG from nearby Australia comes in. The amount of money going here is just staggering. The Gorgon project alone — a joint venture between Exxon Mobil, Chevron and Shell in Australia — will cost some $50 billion. It already has supply contracts from India and China worth $60 billion and will surely get more before it opens in 2014.
There are other firms pushing ahead with aggressive LNG ambitions. Woodside Petroleum, an Aussie oil and gas company, wants to be the leader in LNG by 2020.
As a result of all this activity, Australia will challenge Qatar as the world’s largest LNG exporter. One analyst quoted here said: ‘The numbers are phenomenal. When you look at them, it’s mind-boggling. It’s going to be LNG boom times.’
It’s quite possible that in the next decade, LNG will surpass coal as Australia’s most valuable export. The government is certainly supporting LNG projects — it will add a gush of tax revenues to its coffers. Look at what oil did for the Middle East; the same kind of thing could well happen for Australia.
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