Shale Gas Will Give Australia The Required Thrust To Dominate Global LNG Trade

Release Date: 03-Oct-2012

Australia is looking to build its shale gas reserves rapidly to gain a better foothold in the world shale gas market and also increase its natural gas exports. Its biggest market is the ever energy hungry Asia. As Asian nations are slowly moving towards becoming gas based economies, Australian gas is finding more buyers and better markets. This is the right time for Australia to tap the market and flood it with its own gas produce. China, a key exporter of Australian LNG has found its own shale reserves, probably the world’s largest and is fast developing it. This will reduce its dependence on imports from Australia. That is why, Australia should keep feeding its gas to China till it is able to produce its own gas and for that, Australia will have to move fast to develop and produce its shale gas.

Companies in and out of Australia are eager to grab a handle in the fledgling Australian shale gas landscape. With about 396 Trillion Cubic Feet up for grabs, no one wants to be left behind. in very small quantities. ‘Move in Early’ seems to be the motto of most of the companies. While the usual Australian oil and gas giants are certainly there, foreign companies also are yearning for their share of the pie. The key for domestic companies would be money and for the international companies would be their technology. The marriage of these two is what Australian shale gas sector needs to start its flight. Shale gas development comes after the Australian coal seam gas sector, after booming for so long, has started showing signs of weariness.

The shale gas market in Australian will depend largely on its conventional natural gas market in terms of prices. The most lucrative point for a company to develop shale gas reserves is the high price of shale gas in the market. Australia is already an exporter of natural gas, which is sold at a cheaper price than shale gas. Unless Australian conventional natural gas supplies do not decrease, the prices will not come down, making it a problem for companies to sell their shale gas produce. The market will have to balance itself to accommodate shale gas and bring the pricing to a level where the shale gas companies can make a profit.

With the discovery of huge shale gas reserves, Australia now has the opportunity to become the largest LNG exporter. Gas produced from shale will be exported along with the conventional gas in the form of LNG, thus, more LNG export terminals will be required to handle such a large volume of gas. This is a golden chance for companies that have the capability to enter the LNG market.

With opportunities, Australian shale gas market has its own challenges that will be faced by the companies. A lot of the 396 Trillion Cubic Feet of recoverable shale reserves available in Australia is in far away remote places, making it difficult to develop these reserves. The remoteness of the basins will affect the development due to lack of services and facilities and later on after production the transportation of this gas will be a challenge; if pipelines are laid then the cost of the gas will increase, at least initially.

The future of shale gas will largely depend on the assessments that will establish that the estimated reserves as commercially recoverable or not. The investments will be riding on this information and as soon as a positive outlook is presented, companies will rush in to get a share of the shale gas pie in Australia. There is little speculation right now regarding the productivity of these reserves but the international companies are not leaving anything to chance. The shale gas process of exploration and production will, by itself, take at least three to four years to begin production. The future, though, rides on the initial assessment of these shale plays.

The research report “Australia Shale Gas Market Analysis” published by KuicK Research is a detailed text that comprehensively explains the future of shale gas in Australia along with the rationale and the conditions bringing about such a positive change in the fossil fuel landscape of the country. Australia is all set to take over Qatar as the world’s largest LNG exporter after the commencement of production of shale gas in the country, boosting its economy further a few notches.


For more information please visit “Australia Shale Gas Market Analysis”

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