Australian LNG industry shrugs off potential threat from US

The QCLNG site on Curtis Island, Gladstone.
The QCLNG site on Curtis Island, Gladstone. David Sparkes

THE threat of an American energy boom eating into our blossoming gas industry has been shrugged off by major industry players and its national peak body.

A report from the United States by Deloitte suggested that as the US flooded the international market with huge amounts of shale gas, it would steal customers from Australia's growing liquefied natural gas sellers.

In Queensland alone, more than $50 billion is being spent to harvest coal-seam gas, funnel it to plants near Gladstone and convert it into LNG for export.

By 2030, Australia is predicted to lead the world in LNG production, knocking Middle-Eastern powerhouse Qatar from the top spot.

As America ramps up its exports, other gas-producing nations would be "displaced", the report said.

Australia would cop the worst of it as a supplier because coal seam gas was such an expensive commodity to harvest then refine.

Both the Santos GLNG project and Australia Pacific LNG projects - totalling more than $40 billion in investment - have secured long-term contracts to supply gas to China and Japan.

However, representatives from each said industry and government cooperation would be needed to keep them strong against overseas competitors.

A response was not delivered from BG Group's QGC project before deadline on Monday.

The Australian Petroleum Production Exploration Association said the US was not expected to "overwhelm the market".

"Australia's major challenge is its cost effectiveness," a spokesman said.

"The cost of doing business and the factors causing costs to increase will ultimately determine Australia's future share of the global LNG market."

Shale gas and CSG harvesting use similar processes, although shale gas requires deeper drilling.

In the past 15 years, the US has gone from using no shale gas to it now representing a quarter of America's national gas consumption.

Topics:  aplng curtis island gas gladstone lng resources

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