Australia: set to lead the way in LNG

The last decade has seen significant growth in the LNG sector with, by 2007, 13 exporting and 17 importing countries and a substantial increase in both liquefaction and regasification capacity.

With gas currently accounting for nearly a quarter of all energy consumption and the International Energy Agency (IEA) predicting that gas demand will grow at a faster rate than oil, there is much going for LNG as a highly effective method of bringing gas to market from remote reserves.

Growing economies

It is also offering significant opportunities for the growing of countries’ economies - the US$ 3.8 billion project in Peru, for example, will see the country become a net exporter of gas. Today the world’s largest LNG exporters are Qatar, Indonesia, Malaysia, Algeria and Trinidad and Tobago.

Projects

And there is much more to come. Search EICDataStream, the EIC database which tracks over 7000 global energy industry projects, under current and future ‘LNG receiving terminals and floating, storage and regasification plants’ and details of 93 projects can be found.

From liquefaction processes and equipment to onshore and offshore terminals, shipping and storage, and regasification processes and equipment, many of these projects are likely to be of strong interest to the global energy supply chain.

Focus on Australia

One such country that is taking a lead in LNG is Australia with some experts predicting that the country will become the second largest LNG producing nation by 2015. EICDataStream currently shows 24 currently active and future LNG projects in Australia.

According to a July 2009 report from market analysts GlobalData, the oil price recovery and demand for cleaner fuels is rejuvenating investments in the Australian LNG market. High profile projects include Woodside’s Pluto LNG plant in Western Australia, which will have a capacity of 4.8 million tpy and is currently under construction. A second liquefaction train is also planned, currently at the FEED stage.

There is also Chevron’s Gorgon LNG plant at 15 million tpy (with Shell and ExxonMobil as partners). The expected operational start date is 2014. India’s Petronet LNG Ltd has already requested 1.5 million tpy of LNG over a 20 year period. Finally, there is the Ichthys LNG plant near Darwin at 8 million tpy and a joint venture between Total and Japanese energy company INPEX. The FEED has already been awarded with a final investment decision in 2010.

The Japanese connection is strong with Japan; the world’s largest LNG importer. The Pluto LNG project includes 15 year sales agreements with Kansai Electric and Tokyo Gas for the combined supply of up to 3.75 million tpy of LNG.

Looking forward

So the future of LNG remains bright? Clearly, the recent economic turmoil has had an impact on the LNG sector with a decline in demand and spot purchases and a decline in available credit - so much so that it is perhaps inevitable that some Australian projects will be delayed.

However, the fundamentals and long-term demand for LNG remain strong. At the forefront of these developments will remain Australia, bringing a host of new opportunities to the energy supply chain.

Author: Phil Goddard, Business Information Director, The EIC

The EIC (Energy Industries Council) is the leading trade association for UK companies that supply capital goods and services to the energy industries worldwide. www.the-eic.com.

Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/14102009/australia_set_to_lead_the_way_in_lng/