The US Ambassador in Australia, John Berry, has said that the Australian LNG industry should not be concerned about rapid growth in the US gas sector following the recent shale gas revolution and the resulting prospect of large US shipments of LNG to attractive Asian markets.
After large discoveries of shale gas in the US, the world’s largest economy is gearing up for shipments of LNG across the globe over the coming years, particularly to the target markets of Asia where demand is the strongest – the Asia Pacific region accounted for just under 70% of global imports in 2012. Australia is also targeting this market, but some industry experts believe that they will be out-priced by US exports of LNG, which is priced on the Henry Hub index. In December 2013, Henry Hub natural gas was traded at the price of US$ 3.90, considerably lower than elsewhere around the globe.
Catering for Asian demand
“We [the US] are now in the market,” Berry said. “We will continue to be in the market in the future. That may increase the competitive pressures but Australia will be able to very effectively compete.
“The demand that is going to be in Asia – from Japan, Indonesia, Vietnam, Malaysia, China, from all of those places together – is an enormous demand that cannot only accommodate Australia but the US and more.
“This is a marketplace that needs this cleaner source of energy so we can continue economic progress in a cleaner way than we have been able to in the past. It is in both of our interests to encourage the development of our respective markets to meet demand.”
Edited from various sources by Ted Monroe