{"id":30316,"date":"2012-06-19T01:46:59","date_gmt":"2012-06-19T05:46:59","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/2012\/06\/why-liquefied-natural-gas-makes-australia-the-next-energy-hotbed\/"},"modified":"2012-06-19T01:46:59","modified_gmt":"2012-06-19T05:46:59","slug":"why-liquefied-natural-gas-makes-australia-the-next-energy-hotbed","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2012\/06\/19\/why-liquefied-natural-gas-makes-australia-the-next-energy-hotbed\/","title":{"rendered":"Why Liquefied Natural Gas Makes Australia The Next Energy Hotbed"},"content":{"rendered":"

By MoneyMorning.com.au<\/a><\/strong><\/p>\n

A recent report by Exxon Mobil Corp. (NYSE: XOM)<\/strong> predicts that while energy demand will remain essentially flat in developed economies, demand in emerging markets will rise by nearly 60%. <\/p>\n

This growth is good news for natural gas<\/strong>, since the world increasingly favors lower-carbon energy sources. In fact, the International Energy Agency (IEA) predicts natural gas will surpass oil<\/a> as the planet’s number one source of energy beginning in 2035. <\/p>\n

<\/span><\/p>\n

What’s more, emerging economies are big importers of liquefied natural gas (LNG), the fuel’s most portable form. That’s why the world’s biggest oil and natural gas companies<\/a> are placing huge bets that LNG<\/a> is the “new oil.”<\/p>\n

And most of their Monopoly-sized wagers are saying Australia’s the place to find it. <\/p>\n

Here’s why Australia will be the globe’s next energy hotbed.<\/p>\n

Australia’s $200 Billion LNG Bet<\/h3>\n

<\/center><\/p>\n

Australia’s vast resources along with its close proximity to fast-growing markets in Asia make it an ideal spot for big players looking to profit from the planet’s insatiable appetite for energy<\/a>.<\/p>\n

“Australia is superbly placed to benefit from growing world gas demand, particularly in the Asia-Pacific region,” Gavin Wendt, Founding Director and Senior Resources Analyst at MineLife told CNBC<\/em>.<\/p>\n

Now energy companies like Exxon and Chevron Corp. (NYSE: CVX)<\/strong> are reaching into the Outback and other remote parts of Australia to tap supplies of the world’s next great energy source. <\/p>\n

Australia’s natural gas resources<\/a> consist of about 390 trillion cubic feet of natural gas, which could double in size if exploration for shale gas<\/a> is successful. So the majors are racing to drill wells and build pipelines in a mad dash to tap the trillions of cubic feet of natural gas that will be converted into LNG. <\/p>\n

And even though the country has strong environmental regulations, its stable political and legal systems make it a user-friendly partner for investors.<\/p>\n

Australia is currently the fourth-largest exporter of LNG<\/a> in the world behind Qatar, Malaysia and Indonesia. But a wave of LNG projects worth almost $200 billion is set to lift Australia to the number one spot by the end of the decade.<\/p>\n

Three large-scale LNG projects are expected to come online in the next five years that will produce almost 59 million metric tons annually – quadrupling Australia’s capacity to roughly 83 million metric tons.<\/p>\n

The biggest projects also involve the construction of LNG terminals to feed Asia’s natural gas demand<\/a>. Most of the natural gas will be converted to LNG and make its way to markets like China, South Korea and Japan. <\/p>\n

The Natural Gas Companies Cashing in on Aussie LNG<\/h3>\n

<\/center><\/p>\n

Unlike oil, the price of natural gas<\/a> is regional, not global. <\/p>\n

So while a million BTU of natural gas in the United States is now below $2.00, a million BTU of LNG trades for over $9.00 in the United Kingdom and $15.00 in Japan. <\/p>\n

Since it will be years before the U.S. will be ready to export LNG, Australian producers will have the Asian markets to themselves for a while.<\/p>\n

That’s why the oil majors are venturing Down Under and betting billions on natural gas deals.<\/p>\n

Investors should look for natural gas companies that are focused on coal seam gas, an unconventional fuel that’s become one of the world’s hottest energy plays.<\/p>\n

One reason is that coal seam gas is cheaper to produce since the wells are shallower than shale and do not always need to be “fracked.”<\/p>\n

More than $20 billion has been spent on these deals by companies including Royal Dutch Shell PLC (NYSE ADR: RDS)<\/strong> and ConocoPhillips (NYSE: COP)<\/strong>. Just two weeks ago Exxon took a 10% stake in a coal seam deal worth roughly $15 billion.<\/p>\n

Chevron has also teamed up with Exxon on a major stake in the $41 billion Gorgon gas project, the country’s largest natural gas resource<\/a>.<\/p>\n

The integrated oil majors are the types of companies that have the resources to develop these large scale projects.<\/p>\n

But keep in mind these are long-term projects.<\/p>\n

Rewards will only come to investors with the patience to hold the natural gas companies that are positioning to profit from Australia’s vast resources. <\/p>\n

Don Miller
\nContributing Writer, Money Morning<\/strong><\/p>\n

Publisher’s Note:<\/em> This is an edited version of an article that first appeared in Money Morning (USA)<\/a><\/em><\/p>\n

From the Archives…<\/em><\/strong><\/p>\n

The Problem With the Spanish Bailout<\/a>
\n2012-06-15 – Keith Fitz-Gerald <\/p>\n

Australian Housing – How to Avoid This Pauper’s Retirement Trap<\/a>
\n2012-06-14 – Kris Sayce <\/p>\n

Why Warren Buffett is Loading Up on Tungsten<\/a>
\n2012-06-13 – Don Miller<\/p>\n

China’s Economic Data Statistics: Just Add Salt<\/a>
\n2012-06-12 – Dr. Alex Cowie <\/p>\n

Why Graphite is One of the Few Places For Savvy Investors to Make Money<\/a>
\n2012-06-11 – Dr. Alex Cowie <\/p>\n

\n<\/img><\/a> <\/img><\/a> <\/img><\/a>\n<\/div>\n


\nWhy Liquefied Natural Gas Makes Australia The Next Energy Hotbed <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

By MoneyMorning.com.au A recent report by Exxon Mobil Corp. (NYSE: XOM) predicts that while energy demand will remain essentially flat in developed economies, demand in emerging markets will rise by nearly 60%. This growth is good news for natural gas, since the world increasingly favors lower-carbon energy sources. In fact, the International Energy Agency (IEA) … <\/p>\n

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