Rising costs in Australia’s LNG sector have led many analysts to suggest that continued expansion is limited, especially as growing production in Africa and North America offer alternative supplies, and areas for investment.
Australia currently has $190 billion worth of LNG projects under development, and is soon set to overtake Qatar as the world’s largest LNG exporter, but the continued expansion is under doubt.
Despite these growing concerns about the cost competitiveness of LNG projects in Australia Exxon Mobil (NYSE: XOM) and BHP Billiton (NYSE: BHP) have decided to work together to build the world’s largest floating LNG processing and export plant.
The plant will be situated off the northwestern coast of Australia, and be around half a kilometre long (around the length of five football fields). It will be the largest floating facility in the world.
The LNG plant will increase Australia’s total LNG production capacity by 30%, on its own producing 6-7 million tonnes of LNG a year, enough to meet the needs of Japan, the world’s largest importer of gas, for a month.
By. Joao Peixe of Oilprice.com
Joao is a writer for Oilprice.com