The liquefied natural gas market will see demand double by 2030. The latest numbers have grabbed the attention of Chevron and other oil companies who hope to capitalize on LNG sales, due to decreased investment into fossil fuel energy technologies. Millions of dollars will be invested into LNG imports and exports in the upcoming years due to the fact that governments are encouraging cleaner energy. China's LNG demand is also skyrocketing at an annual rate of 15% over the next six years. They will be importing record amounts of LNG as natural gas power becomes more important across Asia. The demand is signaling a rise in prices for LNG that will continue until August.
The growing demand for imports in Asia means that Australia is in the prime position for exporting liquefied natural gas to the region. Chevron's Gorgon LNG export plant in Western Australia was primed and ready to meet the demands from Asia, but then an unplanned shutdown in April caused several issues. Chevron now confirms that the plant is back in operation.
"We confirm start-up activities are underway on Gorgon train one with a plan to safely resume production in the coming weeks," a spokesman for Chevron said. The plant cost Chevron US$54 billion to set up.
The Gorgon plant is part and parcel of Australia's efforts in LNG production, making them one of the main exporters. The Sydney Morning Herald estimates that Australia has pumped $200 billion into LNG project investment. The United States has lagged behind in recent history but are dedicating themselves to becoming a big player in exports. With the renewed operations at the Gorgon plant, Australia could be surpassing Qatar as the biggest exporter of LNG. According to government data, Australia will be the biggest exporter by 2019.
Alexandra Heath from the Reserve Bank of Australia said:
The decline in (LNG) prices is unlikely to lead to a significant reduction in production from existing producers because the high fixed costs of building the infrastructure have been paid and marginal production costs are relatively low. Our ability to benefit from rising demand for cleaner fuels will depend on our willingness to invest and innovate. It is important that Australian companies remain at the forefront of developing expertise in these fields, not just for the environmental benefits that they will bring, but to be able to export these technologies to other countries."
The International Energy Agency also recently affirmed the fact that LNG investment will be growing by leaps and bounds. The investment will increase by 45% between 2016 and 2021.