Australia eyes future as leader in natural gas
August 31, 2009
By Neil Sands
Melbourne - Australia is poised to become "the Middle East of gas" as Asia's fast-growing economies queue up to buy its vast reserves in liquid form, analysts say.
The government last week approved the massive Gorgon liquefied natural gas (LNG) project off Western Australia, which Prime Minister Kevin Rudd said would cost A$50 billion (R327bn) to build and would generate 6 000 jobs.
The joint venture by Chevron, Shell and ExxonMobil is already underpinned by supply contracts with China and India worth more than $60bn (R464bn), and more customers are likely to sign up before it begins operating in 2014.
Gorgon is just one of many LNG projects planned in the next decade that analysts say will earn tens of billions of dollars and see Australia challenge Qatar as the world's major gas exporter.
Hailing Gorgon's $41bn contract with PetroChina this month - the largest trade deal in Australian history - the government said LNG was an important part of the country's future prosperity.
Asian demand for coal and iron ore helped Australia's economy avoid recession during the global downturn, and State One Stockbroking analyst Peter Kopetz said LNG was the next boom commodity.
Australia exported 15.2 million tons of LNG in 2006, a figure the government estimates will quadruple by 2015 if all currently planned projects proceed.
"Potentially, there could be many more projects coming on board," Kopetz said, pointing out that new discoveries were being made all the time.
He said Australia had the potential to become "the Middle East of gas" in coming decades as the world's oil supplies dwindled.
However, not everyone is happy about the rush to exploit LNG reserves, with green groups raising concerns that environmental issues are being neglected. Environment minister Peter Garrett conceded Gorgon was "greenhouse-gas intensive" and could raise national emissions by up to 1 percent if ambitious plans to pump carbon dioxide emissions into the seabed fail. - Sapa-AFP
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