ASSESSMENTS

Australia's LNG Sector Comes Under Strain

Oct 3, 2013 | 10:39 GMT

Australia's LNG Sector Comes Under Strain
Liquefied natural gas storage tanks are shown at the Woodside-operated North West Shelf Gas Venture in Western Australia on June 17, 2008.

GREG WOOD/AFP/Getty Images

Summary

Australia has vast natural gas resources and has positioned itself as a major producer. However, the higher costs of liquefied natural gas (LNG) plant construction likely will lead Australia to delay, cancel or scale down proposed LNG plants. Increasing supplies from other sources, including the United States, could also mean that Australia's LNG producers will not see the returns they once expected.

Growing competition and rising production costs could lead Australia to scale back its liquefied natural gas ambitions....

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