(EnergyAsia, May 17 2012, Thursday) — Drawing on its natural gas reserves of 392 trillion cubic feet (tcf) sufficient to support 184 years of production, Australia could be ready to challenge Qatar’s position as the world’s leading liquefied natural gas (LNG) exporter later this decade, said Energy and Resources Minister Martin Ferguson.
Citing GeoScience Australia’s latest findings, he told an industry conference in Adelaide city this week that the country could double its known gas reserves to 800 tcf with the future inclusion of shale gas. Qatar holds the world’s third largest gas reserves of 900 tcf after Russia and Iran.
Speaking at the Australian Petroleum Production & Exploration Association (APPEA) 2012 event, Mr Ferguson said Australia is now the world’s fourth largest LNG exporter on its way to becoming second behind Qatar as it is soon expected to overtake Indonesia and Malaysia.
Australia has emerged as a global LNG player as a result of major companies investing more than A$175 billion in developing its natural gas reserves over the last five years. For the financial year 2010, Australia exported 20 million tonnes of LNG worth a total of A$10.4 billion. (US$1=A$1).
Mr Ferguson said: “Our exports are forecast to grow by a further 19% in 2012-13 as production from the Pluto facility in Western Australia ramps up. By 2017, based on proposed and committed new projects, Australia’s LNG production capacity is projected to quadruple, potentially making Australia the world’s largest producer of LNG.
“While global economic uncertainty remains a threat to ongoing investment, our trading partners continue to show confidence in Australia’s capacity to meet their energy demands.
“Japan remains our biggest trading partner and accounts for 70% of our LNG exports and post-Fukushima Japan’s appetite for LNG is likely to increase. China is fast making up ground with its demand for LNG growing by almost a third last year, and some analysts predicting another 30% rise this year.
“India also shows impressive potential as a major LNG importer, with import capacity projected to triple by 2015. “
Australia is expected to soon export its first LNG cargo to India from the Gorgon project while preparing the groundwork for new sales Singapore, Thailand, Cambodia and Vietnam, which collectively are projected to import 25 million tonnes by 2017.
Mr Ferguson said Australia’s energy exports will also be supported by the development of unconventional gas, particularly coal seam gas and potentially shale and tight gas, which could yield another 400 trillion cubic feet of reserves.
He said the US shale-gas boom is changing the dynamics of its domestic market and has the potential to influence the global LNG trade. China too is actively exploring its own shale gas reserves.
The developments in the US and China could provide competition for Australia’s LNG players in the export markets.
Australia’s coal seam gas (CSG) sector has been an integral part of the natural gas industry in Queensland and eastern Australia since 1996. Between 2006 and 2011, CSG’s share in the country’s total gas production has risen from 2% to 11%.
CSG accounts for more than 30% of the eastern states’ domestic gas production and is a key component of the country’s domestic gas supply. Companies are investing a total of A$50 billion to develop three CSG-to-LNG projects near Gladstone in Queensland.
But the sector must work on increasing its production in a sustainable manner and address environmental, safety and health concerns even as it is a major contributor to the economy, said Mr Ferguson.
He said the Australian government understands these concerns and is helping to formulate a national harmonised regulatory framework for the industry to address issues related to water management and monitoring, well integrity and aquifer protection, and monitoring of hydraulic fracturing and chemical use.