(EnergyAsia, May 30 2013, Thursday) — Companies will maintain a high level of investment in Australia’s resource sector through 2015, building on this year’s projected record A$85 billion on natural gas, coal, iron ore and other resource projects, said UK-based consultant Wood Mackenzie. (US$1=A$1.03).

Chris Graham, the company’s Head of Australasia Upstream Research, expects natural gas development to be the star attraction, taking in a projected A$48 billion worth of investment in 2013 and A$50 billion next year.

Iron ore, the second most popular resource play, is seen attracting a record high A$22 billion worth of investment, followed by coal which will account for about approximately 10% of 2013 spending.

Gero Farruggio, the company’s Head of Global Metals and Mining Supply Research, said:

“The Australian iron ore sector has invested heavily over the past five years, lifting Australia’s share of global seaborne trade from 35% in 2007 to 44% in 2012. Capital investment in the Australian iron ore sector will reach a peak in 2013 as infrastructure construction and mine expansions are completed by the majors, and Chinese steel production growth moderates. Australia’s dominance will increase further, taking its share of global seaborne trade to over 50% by 2016, as major Pilbara-based mine and infrastructure investments come to fruition.

“Coal will remain subdued over the next few years due to the tough price environment but the resumption of deferred projects, and development of new producing areas, will keep capital spending strong through to 2017.

“This will drive an increase in coal’s proportion of overall capital spend in Australia, taking over iron ore’s position as the commodity with the second highest investment.”

Two states, Western Australia (WA) and Queensland (QLD), will draw a total of A$24 billion of investments or 83% of total capital expenditure in 2013. Most of the spending will be accounted for by large gas and iron ore projects.

Wood Mackenzie expects iron ore projects to lift resource sector investment in WA to record levels.

Committed capital spend for the seven LNG projects that are under construction will ensure that investment remains high for the next three years at least, particularly in WA and QLD. Investment in Northern Territory will also peak over this period, primarily due to construction of the Ichthys project off Darwin.

Mr Graham said: “The outlook for the next three years confirms the strength of the Australian resource sector, as we see investments being made based on decisions taken during the boom years. Today’s decision makers are faced with different challenges in a changing environment. A new wave of major gas and iron ore projects are needed to maintain these levels of investment in the longer-term.”