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Tuesday, 7 June 2011

LNG to add $36 billion a year to Australian economy

LNG to add $36 billion a year to Australian economy

LNG demand to increase
Australia exported $7.2bn worth of natural gas in 2009, the latest figure available / File
AUSTRALIA is poised to become the world's largest producer and exporter of liquefied natural gas by 2020, earning $36 billion annually by then, according to the Paris-based International Energy Agency.
In a special report released in London yesterday, the IEA also says Australia will remain among the leading global suppliers for 15 years through to 2035, reported The Australian.
"We think Australia will play a crucial role in the golden age of gas. It could be a golden age for Australia's LNG industry," said IEA chief economist Fatih Birol, the lead author of the report. "By around 2020 -- only 10 years from now -- Australian production may increase threefold."
Speaking exclusively to The Australian, Dr Birol said the new report examined factors that could result in a more prominent role for gas in the global energy mix.
These included the widespread development of unconventional resources, gas targets in China's 12th Five-Year Plan, a slowdown in nuclear energy and increased deployment of natural gas vehicles.
Based on IEA's price assumptions, Australian exports, totalling 85 billion cubic metres (bcm) in 2020, would generate export revenues of $36bn a year.
Australia exported $7.2bn worth of natural gas in 2009, the latest figure available.
In 2010, it was the fourth-largest exporter behind Qatar, Indonesia and Malaysia.
But whether Australia becomes a world leader in gas exports depended on the policy framework of the Australian government and the industry making timely and sufficient investment.
However, there would be challenges, including the risk of construction delays and cost escalation due to workforce shortages, as large resources projects compete for limited manpower in Australia and also in neighbouring Asia-Pacific countries where other LNG liquefaction projects were under construction.
Asked whether the proposed carbon tax would be a negative, Dr Birol, named by Forbes Magazine as the world's fourth most powerful person in the energy scene, said it would not be a deal-breaker.
The IEA said large projects such as Gorgon, based on Barrow Island in Western Australia and producing about 20bcm per year with a capital investment of some $40bn, would be the backbone of Australian supply. Australia's key customers would be Asian countries, with growth led by China, followed by India.
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