AUSTRALIA will be the biggest loser among liquefied natural gas exporters if US LNG production takes off in a meaningful way, with more exports displaced than any other nation because of the high costs of building new projects.
The finding, in a Deloitte report commissioned by US LNG proponent Cheniere Energy, comes as global engineering contractor KBR - a leader in West Australian projects - says work on US LNG projects is starting to grow as work in Australia dwindles because of surging costs.
The Australian reports if a substantial amount of US LNG is exported to Asia, it could displace the equivalent of one $20 billion project in Australia..
KBR chief executive William Utt said price hikes in Australia meant opportunities for his company were falling.
The nine million tonnes a year of potentially displaced Australian LNG production would be the same amount as the $US20b Australia Pacific LNG project in Gladstone is aiming to produce.
My Comment: The Australian industry claims it has contracts in place (including the burgeoning CSG/ LNG industry in Central Queensland) so time will tell if these will be honoured when cheaper shale gas is available from the US and probably other overseas competitors. Or will a cash strapped government be called on to prop up the expensive new process here, which is battling controversy on many fronts, mainly environmental issues?