Liquefied natural gas (LNG) is natural gas, primarily methane, which has been cooled to minus 161°C to reach its liquid state.
Liquefying natural gas reduces the volume it occupies by more than 600 times, making it a practical size for storage and transportation in specifically designed and built tankers. LNG is widely recognised as a clean, safe and convenient form of energy, which can be readily supplied to distant markets. It is transported to dedicated LNG receiving terminals, which have the capacity to store and re-gasify the LNG for supply to markets. LNG, in its liquid state, is not flammable or explosive.
Australia is a major exporter of liquefied natural gas (LNG), with considerable potential for further development based on its abundant resources of natural gas.
Australia is the third largest LNG exporter in the Asia-Pacific region and the fourth largest LNG exporter in the world, exporting 18.9 million tonnes in 2011 with a value of around $11.1 billion. The LNG industry is attracting significant new project investment providing major benefits in the form of long-term employment, economic benefits and government revenue.
The department plays a pivotal role in the development of Australia's LNG industry primarily through its role in regulating offshore petroleum development focussing on ensuring that offshore development proposals are consistent with good oilfield practice, safe, meet stringent environmental standards, benefit the Australian economy and community, and that regulatory approvals are carried out in an efficient and consistent manner.
Australia's natural gas resources
Natural gas feedstock for LNG production can be sourced from either conventional natural gas fields or from coal seam gas (CSG) associated with coal deposits. Abundant conventional natural gas resources have been identified offshore of North and Western Australia.
In Eastern Australia, large CSG resources have been discovered onshore in Queensland and to a lesser extent in New South Wales.
Australia's LNG plants
Currently, there are three operating LNG processing plants in Australia, the North West Shelf (NWS) LNG Project in Western Australia, the Darwin LNG plant and most recently the Pluto project.
The NWS Project has five LNG production trains with a total production capacity of 16.3 million tonnes per annum (mtpa). The Darwin LNG plant's single production train has a capacity of 3.6 mtpa, and the Pluto project has a single production train with a capacity of 4.3 mtpa.
There are several other Australian conventional LNG projects at various stages of development with the massive Gorgon Project (initial 3-train, 15 mtpa production capacity) under construction and due to commence in 2014–2015. More recently, final investment decisions have been taken for the Wheatstone project (2-train, 8.9 mtpa production capacity), due to be operational in 2016 and the Ichthys project (2-train, production capacity 8.4 mtpa), due to be operational in 2017. Other potential LNG projects that are yet to receive a final investment decision include the Equus LNG Project, Browse LNG and Scarborough LNG with expansion train potential at most projects if market demand and gas supply options align.
The Prelude project (production capacity 3.5 mtpa), which will use Floating LNG technology and is to be operational by 2016–2017. This technology involves the production of LNG via a large, barge-like floating LNG production facility and is suitable for smaller offshore gas fields that are distant from either land or existing infrastructure. Floating LNG has the potential to unlock otherwise stranded gas resources off Australia’s coast with a number of other projects already in planning to use the technology including Bonaparte Floating LNG, Sunrise Floating LNG and Cash-Maple Floating LNG.
As yet, there are no operational CSG-LNG export projects in the world. The Queensland Curtis LNG, Gladstone LNG and Australia-Pacific LNG projects are all currently under construction in Gladstone, Queensland and will become operational from 2014. There are also several other proposals for CSG-LNG plants under consideration for Gladstone and potentially other areas of Queensland.
Australia's LNG exports
Australia has sales contracts in place to supply LNG to Japan, China, and South Korea, and has made spot market sales to numerous other countries. During 2011, the vast majority (73 per cent) of Australia's LNG exports were to Japan, as shown below.
Destination of Australia's LNG exports (2011)
Source: BP Statistical Review of World Energy 2012
- Australia-China Natural Gas Technology Partnership Fund
The Australia-China Natural Gas Technology Partnership Fund is a joint initiative of the North West Shelf Venture and the West Australian and Australian Governments. The fund provides opportunities for training, research and knowledge transfer between the people of China and Australia in the natural gas and LNG industries.
For more information about Australian LNG, contact the Manager, LNG and Petroleum Development, on 02 6276 1000, or email email@example.com.