Australia’s resources and energy earnings are set to increase to $230 billion in 2017-18, with LNG being the largest growth contributor.
The latest Energy and Resources Quarterly report released by the Department of Industry, Innovation and Science predicts the price of LNG will increase modestly, but will be constrained by shale oil production in the US and sluggish growth in global oil consumption.
According to the report, the real value of Australia’s LNG exports is forecast to increase from $23 billion in 2016-17 to $39 billion in 2017-18, driven by higher export volumes and, to a lesser extent, higher prices.
The completion of the final three LNG projects under construction – Wheatstone, Ichthys and Prelude – will underpin strong growth in export volumes and bring total export capacity to 88 MMt/a.
The report also says that LNG will overtake metallurgical coal as Australia’s second largest resource and energy export in 2018-19.
“Australia’s resources and energy export volumes are projected to hold up near their current historical highs over the next five years and in that period earn more than a trillion dollars for Australia,”? said Minister for Resources and Northern Australia Matt Canavan.
“We are seeing healthy growth in commodity prices, particularly iron ore and metallurgical coal, combined with growing export volumes, especially in LNG.
“We are already the largest exporter of coal, bauxite and iron ore, and we could be the biggest LNG exporter as well by 2019.”?
Gas industry delivers
The Australian Petroleum Production and Exploration Association (APPEA) says the report is further confirmation that LNG exports are playing a major role in the nation’s economic growth.
“Australia’s LNG projects will deliver decades of economic growth, jobs and exports,”? said APPEA Chief Executive Dr Malcolm Roberts.
“There is a growing demand for cleaner-burning energy in our region where air pollution is a major cause of premature deaths in some Asian cities.
“With Australia’s abundant supplies of natural gas, the outlook should be extremely positive. But for LNG to continue to be a pillar of the nation’s economy amid challenging market conditions and growing competition from other suppliers, exploration and development must be fostered, not restricted.
“The growth of the export industry has brought the capital to find and develop eastern Australia’s next source of gas supply. And more investment is required – we will need up to $50 billion in continuing investment to 2030 to maintain supply.
“As we look to the COAG Energy Council meeting at the end of the month, the industry urges all governments to consider the ongoing economic, social and environmental benefits offered by a growing gas industry and focus on co-operative action to reduce the cost and risks of producing gas for both the domestic market and for our overseas customers.”?