New LNG giants are set to emerge in the coming years with Australia, for example, competing against traditional LNG exporters such as Qatar, according to new research by GBI Research.
The report, entitled LNG Industry to 2017 – Australia to Overtake Qatar as Global Market Leader in LNG Liquefaction Capacity Due to Recent Discoveries, Planned Projects and Investments, cites the LNG industry of Australia as ‘currently the most promising market in the world’.
Not only is it the most promising market in the world, but is also expected to attain market dominance in the next five years. Recent offshore discoveries have found a huge abundance of reserves in the country, and the Australian government is providing strong support to the industry, in the form of encouraging regulatory structure and initiatives, the report explains.
Asia-Pacific acts as a big customer for LNG imports, fuelled by the region’s growing economies, and neighbouring Australia is ideally positioned to become an LNG export hub meeting this need.
In contrast, the report claims, Qatar is currently the world’s largest LNG exporter but risks stagnation, as the country shows no plans for capacity additions in the near future. Qatar boasted a liquefaction capacity of 77.5 million tons in 2011, but this doesn’t look to change significantly, whereas Australia’s modest liquefaction capacity of 20 million tons in 2011 is expected to reach 124 million tons by 2017.
The report also reflects upon the rise of Floating Liquefied Natural Gas (FLNG) technology, which it describes as a ‘game-changer’ in the future LNG industry.
FLNG terminals are expected to be a technology game-changer in the future LNG industry, due to enormous advantages, despite the technology still being in development stages and yet to commence commercial operation.
In the near future it is expected that 10% of LNG produced globally will be a product of natural gas extracted from offshore basins, which is around 40% less expensive than that from onshore natural gas projects.
Australia has shown its ambitions as a LNG hub through its FLNG activity. After spending many years in R&D and investing over US$500m, Dutch major Shell announced its Final Investment Decision (FID) to construct a floating LNG project at Australia’s Prelude field in May 2011. The project is expected to start by 2017, with a processing capacity of 3.6 million tons.