Australia’s LNG May Help Lead Recovery, Ferguson Says

www.bloomberg.com
June 1

(Bloomberg) - - Australia's proposed liquefied natural gas developments may buffer the economy, Resources and Energy Minister Martin Ferguson said, as the country faces its first recession since 1991.

"Developing Australia's gas resources for LNG, underpinned by long-term supply contracts into Japan, China, Korea and Taiwan, is one of our most prospective opportunities to buffer the economy in the near-term and kick start a new boom in the medium to long-term," Ferguson told the Australian Petroleum Production and Exploration Association conference in Darwin.

A forecast gain in north Asian demand for cleaner-burning fuels has prompted plans for some 10 liquefied natural gas projects in Australia and Papua New Guinea. Australia's oil and gas producers propose projects valued in excess of A$200 billion ($160 billion), the association says.

Potential curbs on oil and gas investment growth identified in APPEA's State of the Industry 2009 report released today include regulatory reform and the design of Australia's proposed emissions trading system. The government remains committed to "getting this scheme right," Ferguson said.

Australia plans to offer permits for six new areas of offshore petroleum exploration, Ferguson said. They include three large deepwater zones on the northern Exmouth Plateau offshore Western Australia state.

Great Australian Bight
The Exmouth Plateau contains the Exxon-Mobil Corp.-operated Jansz discovery, which may hold about 20 trillion cubic feet of recoverable gas, according to the company's estimates. The Jansz field is part of the A$50 billion Gorgon venture with Chevron Corp, and Royal Dutch Shell Plc.

The other three areas are in the central Great Australian Bight off South Australia state where no permits are currently held, Ferguson said. He didn't specify when the permits will be offered.

Australia's economy is in its first recession since 1991, according to central bank Governor Glenn Stevens, who forecast earlier this month that gross domestic product will fall 1 percent this year. BG Group Plc and ConocoPhillips are among companies with stakes in rival ventures aiming to turn gas extracted from coal seams in Queensland into LNG.