Australia Now Japan's Biggest Supplier of LNG

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Researched by Industrial Info Resources (Perth, Australia)--Australia has jumped ahead of Qatar to become the largest single supplier of liquefied natural gas (LNG) to energy-starved Japan for the first time, after the start up of the Woodside Petroleum (ASX:WPL) (Perth) Pluto gas project in the nation's northwest.

While Japan has been the world's largest buyer of LNG for some time now, this is significant for Australia, which set new records in both export volumes and export revenue from LNG within the same period.

The figures will be welcomed by Australia's LNG industry during a time of rising uncertainty as Japan, South Korea and other large buyers strive to win approval to import shale gas from the U.S. to cut their energy bills. At the same time, high wages and environmental sensitivities are driving up the cost of production in Australia, putting projects in the $175 billion pipeline of LNG project proposals in jeopardy.

These reports, published in the latest "Energy Quarterly" report from Energy Quest, show that complaints from Japanese utilities about the costs and worries over project blowouts may be unfounded, as Australia was cheaper than all but six of the 21 suppliers of gas to the island nation.

In 2012, Japan imported a total of 87.3 million ton of LNG, an 11% increase over the year before. About 18.2% of that supply came from Australia, 17.9% came from Qatar and 16.7% from Malaysia.

Energy Quest Chief Executive Graeme Bethune said the start up of Woodside's Pluto LNG project in 2012 propelled Australia into top position among LNG exporters to Japan.

"Australia has captured the biggest share of a growing market for LNG," Bethune said. "One of the major reasons for the increase in Japanese LNG demand is the shutdown of nuclear reactors in that country following the devastating earthquake in March 2011." He also said that Australia's percentage would likely increase over the coming five years as the Gorgon, QCLNG, APLNG, Wheatstone, Prelude and Ichthys LNG projects come into production.

Japan has long been, by far, the biggest buyer of Australian LNG, purchasing 70% of exports.

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