The Reserve Bank of Australia (RBA) has published an article suggesting that although Australian LNG exports will rise significantly in the coming years, the effect on the living standards of Australians will be limited by the high level of foreign ownership of the LNG projects. The article also suggests that low labour intensity of LNG production will lessen the impact on living standards in the country.
According to the article, entitled ‘Australia and the Global LNG Market’, the majority of LNG will be shipped to Asia under long-term contracts linked to the price of oil.
The article, written by Natasha Cassidy and Mitch Kosev in the RBA’s Economic Analysis Department, suggests that the Asia-Pacific LNG market will be influenced by “potential changes to the composition of Asian energy demand, the magnitude of the increase of US LNG exports to Asia and any changes to the traditional oil-based pricing mechanism.”
The full report is available on the RBA website.
Edited by Callum O'Reilly