Australia to be 'Middle-East of gas'

Melbourne - Australia is poised to become "the Middle East of gas" as Asia's rapidly growing economies queue up to buy its vast reserves in liquid form, according to analysts.

The government last week approved the massive Gorgon liquefied natural gas (LNG) project off Western Australia, which Prime Minister Kevin Rudd said would cost A$50bn to build and would generate 6 000 jobs.

The joint venture by Chevron, Shell and ExxonMobil is already underpinned by supply contracts with China and India worth more than US$60bn, and more customers are likely to sign up before it begins operating in 2014.

Gorgon is just one of a clutch of LNG projects planned in the next decade that analysts say will pump tens of billions of dollars into the economy and see Australia challenge Qatar as the world's major gas exporter.

Hailing Gorgon's 41 billion US supply contract with PetroChina this month - the largest trade deal in Australian history - the government said LNG was an important part of the country's future prosperity.

"This unprecedented export deal confirms Australia's importance as a global energy superpower supplying vital clean energy resources and technologies to China and our other Asia-Pacific trading partners," Resources Minister Martin Ferguson said.

Asian demand for coal and iron ore have helped Australia's economy avoid recession during the global downturn but State One Stockbroking analyst Peter Kopetz said LNG was the next boom commodity.

The gas is liquefied for shipping abroad, where it is turned back into gas and distributed via pipeline.

"The numbers are phenomenal. When you look at them it's mind-boggling," he said. "It's going to be LNG boom times." Australia exported 15.2 million tonnes of LNG worth A$5.2bn in 2006, a figure the government estimates will quadruple to 60 million tonnes by 2015 if all currently planned projects proceed.

- Sapa-AFP