Australia's LNG

CGES | AUGUST 2010 | SOURCE: CGES

Australia is an important LNG exporter that is currently home to one of the biggest LNG ventures in the world, the North West Shelf (NWS) LNG project.

In 2009, Australia, exported a little over 24 million tonnes of LNG, roughly 10% of the world total, and is currently ranked as the world’s fourth largest LNG exporter.

Australia's LNG

The future of Australia’s LNG capacity is set to sky rocket with three proposed and 14 speculative liquefaction projects potentially raising the nation’s annual output by an additional 130 million tonnes by 2020. 

The closest project to completion located on the North West shelf is Pluto LNG. The 4.8-million-tonne first train will receive gas from the Pluto and Xena gas fields. The project has been hailed as the world’s fastest developed LNG project, from the discovery of the field in 2005 to expected first LNG in early 2011, even though recent union strike action, occurring as the project reached 90% completion in late June, pushed back the start-up date from its earlier late-2010 target.

There were initial fears that there were insufficient reserves to supply an expansion of Pluto LNG after exploration efforts met with no success. The discovery of Noblige and Larsen has therefore come as some relief, potentially presenting the proposed expansion with the gas resource Woodside has been looking for. There have also been talks of a third, fourth and possibly even fifth train. Final investment decisions on Trains 2 & 3 are targeted for end-2010 and end-2011 respectively.

Australia is ideally located for LNG exports to the booming Asian market. Although the destination of gas from Pluto’s future trains is unsecured (Japan’s Kansai Electric and Tokyo Gas hold 15-year purchase contracts for up to 3.75 mn T/yr – 87% of Train 1 capacity), the risk of securing markets is relatively small.

In 2009 the Asia-Pacific region consumed more than 150 million tonnes of LNG and it is forecast that Japan, South Korea and China alone will consume 200-300 mn T/yr by 2030, a third of which is expected to come from Australia.
 

 

CGES and the Gas trade

An international gas trade study will be published by the CGES later this year. The study will highlight developments in the world’s most important gas-producing countries and major consumers over the next 20 years, which are expected to change the dynamic of the supply-demand balance in future. The CGES believes that demand for natural gas will increase more rapidly than for any other source of primary energy, driven by the power generation sector, where natural gas is becoming the preferred fuel, due in part to its environmental benefits over other fossil fuels.

In this study the CGES will examine future trends in gas supply and demand around the world to 2030, taking into account the potential impact of unconventional gas developments in North America and, potentially, elsewhere. Going beyond a simple global supply/demand balance, the study will also look at the implications for gas trade between countries and regions, examining how trade flows may develop over the next two decades.

 

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