Australia has embarked on a major expansion and investment programme for putting in place massive liquefied natural gas (LNG) infrastructure with around $170 billion worth of current and new projects taking shape.
$170 b investment
Already the fourth largest exporter of LNG in the world, Australia is the third largest LNG exporter in the Asia-Pacific region having exported 18.9 million tonnes of LNG in 2011 worth around $11.1 billion. “The investments in the energy sector have been growing at a massive scale. We have already committed investments of around $170 billion in the LNG sector alone for new energy projects. Companies are setting up projects to match the rise in demand from various parts of the world, especially emerging economies such as China and India,” Australia's Minister for Resources and Energy Martin Ferguson told visiting Indian journalists.
Mr. Ferguson termed the current upswing in investments as the “Gold age of gas” and said the focus is clearly on clean energy and LNG is widely recognised as a clean, safe and convenient form of energy, which can be readily supplied to distant markets. “Australia is prepared to play a leading role in catering to the energy needs of various players in the global economies and for that all possible steps are being taken. China is our biggest customer along with Japan and we see a huge potential with India in view of its growing economy and rising energy needs,” he added.
Of late, India has also been active in seeking LNG contracts in the Australian and U.S. markets and GAIL (India) and Petronet LNG are understood to have patched up an agreement for supply of LNG with the upcoming Gorgon LNG project. Similarly, Indian companies such as Petronet LNG and Gujarat State Petroleum Corporation (GSPC) are also in talks for LNG purchases but the declining gas prices in U.S. have certainly a great bearing on the minds of these players who find Australian LNG to be priced a bit too high.
Undeterred by this, the present Australian Government, with abundant conventional natural gas resources, has identified many offshore areas for possible investments in gas and oil in the Northern and Western Australia. Some of the projects include the North West Shelf Project area; the Gorgon Project fields; Browse Project fields; Bayu-Undan fields; Greater Sunrise Project fields; Scarborough fields; Pluto project fields; and more recently the Wheatstone, Ichthys and Prelude fields.
In Eastern Australia, large resources have been discovered onshore in Queensland and to a lesser extent in New South Wales.
At present, Australia has three operating LNG processing plants. They include the North West Shelf (NWS) LNG Project in Western Australia, the Darwin LNG plant and recently the Pluto project that is ready to produce its fist condensate gas consignment. The NWS Project has five LNG production trains with a total production capacity of 16.3 million tonnes per annum. The Darwin LNG plant's single production train has a capacity of 3.6 million tonnes and the Pluto project has a single production train with a capacity of 4.3 million tonnes.
There are several other Australian conventional LNG projects at various stages of development with the massive Gorgon Project (initial 3-train, 15 million tonnes production capacity) under construction and due for start-up in 2014-15. More recently, final investment decisions have been taken for the Wheatstone project (2-train, 8.9 million tonnes production capacity), due to be operational in 2016 and the Ichthys project (2-train, 8.4 million tonnes production capacity), due to be operational in 2017.
The Prelude project with a capacity of 3.5 million tonnes, which will use floating LNG technology, has obtained a final investment decision and is to be operational by 2016-17. This technology involves production of LNG via a large, barge-like floating LNG production facility and is suitable for smaller offshore gas fields that are distant from either land or existing infrastructure. Other potential LNG projects that are yet to receive a final investment decision are the Browse LNG project, Equus LNG, Pluto trains two and three, Sunrise LNG, Bonaparte LNG, Scarborough, and Cash-Maple Floating LNG.
