(EnergyAsia, May 27 2010, Thursday) — Natural gas is playing an increasingly important role in boosting Australia’s economy while meeting the energy needs of the Asia Pacific region, according to a report just released by the Australian Petroleum Production & Exploration Association (APPEA).
The report found that Australia, which exports 44% of domestic natural gas production, is now the world’s sixth largest LNG exporter with a 9% market share. LNG exports are forecast to increase by 13% this year.
Natural gas is also major energy source, being the third largest source of the country’s primary energy consumption behind coal and oil.
Australia enjoys a geographical advantage of being located near the Asia Pacific region which is the world’s largest and fastest growing LNG market.
Japan and South Korea are the largest LNG importers with China and India also expected to evolve as major markets in the near future. Japan is a critical market for Australia: 79% of Australia’s LNG goes to Japan on long-term contracts.
Australia also exports LNG to South Korea, China and India under medium term contracts. In 2008, Australia accounted for 81% of China’s LNG imports.
In the Asia Pacific region alone, countries with import plants under construction or planned include Malaysia, Singapore, Thailand, Indonesia, Chile and the Philippines.
Prepared for APPEA by consultant KPMG, the Gas Market Report is an independent source of information highlighting Australia’s immense natural gas reserves and resources, key aspects of the its natural gas markets, as well as the dangers associated with inefficient government intervention in competitive energy markets. The report provides an analytical overview of the natural gas market in Australia, its structure, efficiency and future outlook, contributing towards informed energy decision-making and policy development.
The report includes the following sections: Australia’s gas market; Factors affecting gas field commercialisation; Australia’s LNG export markets; The role of gas in a carbon constrained economy; Factors impacting the domestic gas supply market; Gas market efficiency; Gas policy initiatives; and Outlook for the Australian natural gas market.
Belinda Robinson, APPEA chief executive, said: “The Gas Market Report finds Australia has enough energy, including gas, to satisfy a growing domestic energy market that places an ever increasing importance on the use of cleaner sources of energy, at the same time as taking full advantage of the export opportunities for liquefied natural gas (LNG).”
Helen Cook, national executive director of KPMG’s Energy and Natural Resources Group, said the study confirmed natural gas to be a key contributor to Australia’s export earnings and economic growth with a strong growth outlook for 2030.
However, for LNG there is tough competition from other projects planned or under construction around the world.
Australia currently has plans for projects worth over A$220 billion, with the potential to create up to 55,000 jobs and deliver an additional A$10 billion each year in government revenue. (US$1=A$1.15).
Ms Robinson added: “To ensure the potential energy and economic benefits of our industry are realised we must put in place policy settings that encourage new discoveries and development of large-scale projects.”