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As Asia''s rapidly growing economies queue up to buy Australia’s vast LNG reserves, it is poised to become
"the Middle East of gas", reports the
Associated Foreign Press. The government last week approved the massive Gorgon liquefied natural gas
(LNG) project off Western Australia, which Prime Minister Kevin Rudd said would cost 50 billion dollars (41 billion US) to build and would
generate 6,000 jobs. The joint venture by Chevron, Shell and ExxonMobil is already underpinned by supply contracts
with China and India
worth more than 60 billion US dollars, and more customers are likely to sign up
before it begins operating in 2014. Gorgon is just one of a clutch of LNG
projects planned in the next decade that analysts say will pump tens of
billions of dollars into the economy and see Australia challenge Qatar as the
world''s major gas exporter. With the $41 billion US supply contract with PetroChina this month, which is the largest trade deal
in Australian history, the government said LNG was an important part of the
country''s future prosperity. Asian demand for coal and iron
ore have helped Australia''s economy avoid recession during the global
downturn but LNG is expected to be the next boom commodity. The gas is
liquefied for shipping abroad, where it is turned back into gas and distributed
via pipeline. Australia’s government estimates they will quadruple LNG
production to 60 million tons by 2015 if all currently planned projects
proceed. Australia has the potential to become "the Middle East of gas" in coming decades as the
world''s oil supplies dwindled. Western Australia
is the centre of the LNG boom with three huge gas fields off its northwest
coast: the Carnarvon, Browse and Bonaparte basins. On the east coast they also
have significant reserves of coal seam gas (CSG), naturally occurring methane
trapped by water deep underground that can be converted to LNG. Shell plans a
CSG plant in Queensland expected to produce up to
16 million tons of LNG a year, with other energy giants such as Britain''s BG
Group, ConocoPhillips, and Malaysia''s Petronas
also developing projects in the area. Existing LNG fields in Malaysia and Indonesia were coming to the end of their operational
life, creating a market for Australian gas.
