As we enter stage II of the LNG boom, many analysts are focusing on how the United States will fit into the equation.
But it’s important to keep in mind that the LNG export story doesn’t just affect the United States.
By 2020, the United States will still only account for about 11% of total LNG exports. And Qatar is currently the world’s biggest supplier of LNG.
That being said, today I’d like to focus on three other regions of the globe that have the potential to become massive LNG exporters in the near future…
LNG Exporter #1: Canada. I already discussed Canada’s energy prospects in my previous article.
Just like the United States, Canada is set to become a major player in the LNG market in the later part of this decade – and in the 2020s. That is, if the politicians don’t get in the way.
However, the country does have to build out its infrastructure. LNG terminals have to be built, along with pipelines – and even roads – in order to access and transport the natural gas located in remote areas of Alberta and other provinces.
LNG Exporter #2: Africa. Another region of the globe with a bright LNG outlook is eastern Africa. Offshore regions in Tanzania and Mozambique hold undeniable potential to produce a lot of natural gas.
But here, infrastructure will have to be built almost entirely from scratch. Therein lies the problem…
Many of the companies exploring here are small, and they can’t afford the massive expense associated with such a buildout. Even the larger companies, such as Anadarko Petroleum (APC) and Italy’s Eni SpA (E), lack the experience of being involved in major LNG projects.
LNG Exporter #3: Australia. This decade, the largest source of new LNG supplies will be the “lucky country” – Australia. Within several years, it’s expected to surpass Qatar as the world’s largest exporter of LNG.
That’s because, as in the United States, natural gas production is on the rise.
Government forecasts indicate that Australian gas output will rise to 100 million metric tons by 2018. And its gas exports are expected to climb to 81% of production by 2018. That compares to 53% in 2012.
Indeed, Australia currently has more new LNG plants under construction than any other country, including the United States. Once completed, the new projects will add 61.4 million tons of LNG capacity by June 2018. Australia will have 85.8 million tons of capacity by that date.
By comparison, there are only 17.8 million tons of LNG capacity currently under construction in the United States. That’s largely thanks to government delays in approvals for LNG plants.
What’s more, LNG exports will displace iron ore as the biggest source of Australia’s export growth in this decade.
And analysts believe that Australia will export 80 million tons of LNG by 2018. Earnings from LNG projects are forecast to increase five times – to more than A$60 billion ($49 billion) through June 2018, according to Australia’s Bureau of Resources and Energy Economics.
So there’s no question that – outside the United States – Australia is the go-to place for an edge in the natural gas market.
But how can you invest in Australia’s LNG boom?
Four Ways to Play Natural Gas in Australia
And don’t forget the domestic firms like Santos Limited (SSLTY), which was mentioned by Karim Rahemtulla is his article. It’s involved in the $18.5-billion Gladstone LNG project, which is 80% completed.
Another such Australian firm is Origin Energy (ORG.AX), which is involved in the A$24.7-billion Australia Pacific LNG project.
Bottom line: When thinking about investing in LNG, don’t forget about Australia. It’s the closest source of LNG for Asian countries – such as Japan, China and South Korea.
And “the chase” continues,