The Economist: Australia's gas exporters (1)

SIX years ago a consortium planned to pipe gas from Papua New Guinea across the Torres Strait to Queensland to fill a looming gas shortage in eastern Australia. That was before a gas revolution transformed Queensland itself. The volume of gas drilled from coal seams under the state has more than quadrupled since then. A consortium including BG Group of Britain is due to ship the world’s first exports of coal-seam gas, chilled and condensed into liquefied natural gas (LNG), to Asia next year. Santos and Origin Energy, two Australian companies, will follow.

Australia’s gas boom has prompted forecasts that it will overtake Qatar as the world’s biggest LNG exporter by 2020. But the rise of North America and east Africa as potential rivals and the soaring costs of building liquefaction plants in Australia now worry its gas investors. Until recently the country produced only small quantities of gas, from conventional wells under the Indian Ocean. Now new technology is opening up unconventional reserves, in coal seams, shale beds and elsewhere (see next article), which were once thought too costly to exploit. Australia’s gas reserves have risen in rank from 15th in the world five years ago to 11th, according to BP. MORE