Australian LNG: opportunities for global leadership

Abstract

Australia is now at the centre of global LNG expansion, with first production from Pluto LNG in 2012 and seven greenfield projects currently under construction. In the past 12 months alone, four projects with a combined capacity of almost 30 million tonnes per annum have been sanctioned.

Guiding these mega-projects through the construction phase and towards first production will pose many challenges in an environment of rising costs and a tight labour market. And even if proposed schedules are met, bringing new projects on line does not in itself guarantee a global leadership role for Australian LNG.

Australia may well rival Qatar as the world’s largest LNG exporter by the end of the decade. But the task we should set ourselves is for Australian LNG to be a world leader in all facets of the industry. This is necessary for future customers to continue paying a premium for Australian LNG in an environment of increasingly diverse gas supply.

In terms of global reputation, an increasingly crowded Australian LNG industry will only be as strong as its weakest link. Greater collaboration within industry, and between industry and government, can ensure Australia’s hard-won reputation for product quality and reliability, innovation and safety is maintained and improved. Such cooperation must also seek to address Australian LNG’s comparative disadvantages relating to costs, labour and infrastructure.

While Australian LNG’s focus in the coming years will be on project delivery, we also must keep an eye on the longer game to ensure Australia remains the best location in the world for LNG operators, investors and customers.