Australia is America’s biggest competitor in the fast growing global LNG market, but the Pacific nation is struggling to realize its natural gas exporting potential.
Over the next decade, what the International Energy Agency calls "footloose" U.S. cargoes will dramatically shake up global LNG trade, putting pressure on prices and forcing changes in how contracts are struck, says a report in Nikkei Asian Review.
Cost overruns, delays, and technological hurdles have all slowed Australia down
in its attempts to become the world’s premier LNG exporter.
In its latest World Energy Outlook, the IEA says it expects more flexible prices and terms in the LNG market -- a "marked change" from the previous system of strong fixed-term relationships between suppliers and customers.
Australia's expected ascendancy to global leadership in liquefied natural gas exports by 2019 could be short-lived, with rival suppliers in the U.S. on track to lift their own gas exports substantially in the 2020s on the back of an expected American energy boom driven by the new administration of President Donald Trump.
U.S. competition is likely to have an impact on key suppliers such as Australia, which sells all its LNG exports on long-term contracts to power utilities in Japan
, South Korea, China and Taiwan. Other new LNG supplies from Southeast Asia, Africa and Russia could give buyers even more flexibility.
A report by Reuters says that Australia is still likely to become the world's biggest LNG exporter, dispatching about 85 million tonnes a year by the end of the decade, up from 30.7 million tonnes in 2015 and 45.1 million tonnes last year.
But the pace of growth is much slower than expected because of snafus and higher-than-expected costs that have delayed plans to start or increase LNG exports from four megaprojects, Gorgon, Ichthys, Prelude and Wheatstone, all along or off the coast of northwest Australia.