Australia is in the midst of a massive construction wave for new liquefied natural gas (LNG) capacity, seeking to profit off of sky-high demand in Asia for the fuel. Already one of the world’s largest exporters of LNG, Australia plans on moving to the top spot over the next 3-4 years, potentially overtaking Qatar. It currently has the capacity to export 23 million tonnes per annum (mtpa), but it plans to almost quadruple that total by 2017. The 62 mtpa under construction in the land down under accounts for almost two-thirds of the total LNG capacity under construction around the world.
We have written in the past about the investment opportunities in Australian LNG, particularly with the coming wave of Chinese demand for the liquid fuel. But this time, let’s take a look at Australia’s natural gas sector from an upstream perspective.
Booming Natural Gas Production
Australian LNG could be a hugely profitable opportunity before the decade is out, but the export terminals are going to need enormous volumes of natural gas in order to supply all of those LNG trains. And once Australia is able to connect to China, Japan, and South Korea via LNG, demand for Australian natural gas is going to surge. That, in turn, will cause natural gas prices to rise.
That means that there will be a great opportunity to invest in upstream Australian natural gas producers. Australia has already steadily lifted its production of natural gas over the last thirty…