Australia is a major exporter of liquefied natural gas (LNG), with considerable potential for further development based on its abundant resources of natural gas. Australia is the third largest LNG producer in the Asia-Pacific region and the fifth largest LNG producer in the world, exporting 15.2 million tonnes in 2006-07 with a value of around $5.2 billion.The LNG industry has the potential to attract significant new project investment over the next 10years, providing major, long-term employment, economic and government revenue benefits.
The Department plays a pivotal role in the development of Australia' LNG industry primarily through its role in regulating offshore petroleum development. Given the massive scale of investment necessary to produce LNG, the Department has also sought to create an environment conducive to long term contracting via an active program of bilateral engagement with current and prospective markets. As the LNG market has begun to mature, the Department is now focussing its efforts on facilitating approvals and planning for Australian LNG projects.
What is LNG?
LNG is natural gas, primarily methane, which has been cooled to minus 161°C to reach its liquid state. Liquefying natural gas reduces the volume it occupies by more than 600 times, making it a practical size for storage and transportation in specifically designed and built tankers. LNG is widely recognised as a clean, safe and convenient form of energy, which can be readily supplied to distant markets. It is transported to dedicated LNG receiving terminals, which have the capacity to store and re-gasify the LNG for supply to markets. LNG, in its liquid state, is not flammable or explosive.
Australia' methane gas resources
Methane gas feedstock for LNG production can be sourced from either conventional natural gas fields or from coal seam methane (CSM) gas. Abundant conventional natural gas resources have been identified offshore of North and Western Australia in:
- the North West Shelf Project area
- the Gorgon fields
- the Torosa/Calliance/Brecknock Fields
- Bayu-Undan
- Greater Sunrise
- Scarborough
- more recently, the Pluto, Ichthys and Io-Jansz fields.
In Eastern Australia, large CSM resources have been discovered onshore in Queensland and to a lesser extent in New South Wales.
Australia' LNG plants
Currently, there are two operating LNG processing plants in Australia, the North West Shelf (NWS) LNG Project in Western Australia and the Darwin LNG plant. The NWS Project has a production capacity of 11.9 million tonnes per annum (mtpa) and a fifth production train, due for completion in late 2008, will add 4.4 mtpa to its capacity. The Darwin LNG plant' single production train has a capacity of 3.7 mtpa and the construction of a second train is under consideration. There are several other Australian LNG projects at various stages of development with the 4.3 mtpa Pluto LNG plant being the most advanced. As yet, there are no operational CSM LNG projects in the world. However, there are several proposals to construct CSM LNG plants in the Gladstone area of Queensland.
Australia' LNG exports
Australia has contracts in place to supply LNG to Japan, China and South Korea. During 2006-07, the vast majority of Australia' LNG exports were to Japan as shown in Figure 1 below.
Figure 1 - Destination of Australia's LNG Exports (2006-07)
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Note: Export volumes used are estimates based on current sales and purchase agreement contracts
Australia-China Natural Gas Technology Partnership Fund
At the time the North West Shelf (Australia) - Guangdong (China) LNG sales agreement was struck, the Australian Government, the Government of Western Australia and the partners in the North West Shelf Venture agreed to establish the Australia-China Natural Gas Technology Partnership Fund that aims to provide opportunities for training, research and knowledge transfer between the people of China and Australia in the natural gas and liquefied natural gas (LNG) industry.
The Department of Resources, Energy and Tourism has supported research into the use of LNG in major markets. Recent studies can be found under publications.
Publications