Australia 'Well Placed' to Meet Global LNG Demand

This is the second article of a three-part series on "How to Work in Australia".

Australia is well placed to meet growing gas demand in the Asia-Pacific region, and could become the largest LNG exporter worldwide in the future. A number of LNG projects are in operation or under construction. Australia also will become the home of Shell's Prelude project, the first floating LNG project ever to be built.

Labor shortages and high investment costs will likely result in some proposed LNG projects either being consolidated or developed over a longer timeframe versus others. Some companies may decide against being the first mover, and would rather wait and hire contractors later after they've had more experience, said Dale Nijoka, leader of Ernst & Young's global oil and gas practice.

The country is well-positioned to take advantage of growing Asian gas demand, has an opportunity to become one of the largest LNG exporters worldwide. The question remains whether Australia will be able to overtake Qatar as the world's number one exporter.

"I don't think the Qataris will sit on their hands and not protect their market," said Nijoka, noting that Qataris have the advantage of being able to make money shipping LNG to numerous destinations worldwide.

"The government is very supportive of the oil and gas industry but very protective of their natural resources," Nijoka noted, who believes the government has created a good starting point for foreign investment in Australia, with the right mix of an economy friendly to foreign investment while taking a measured approach to the number of workers coming into the country.

"They don't want a big bang approach with five million workers being brought in," Nijoka said.

How To Work in Australia Series

• Part 1: Worker Shortages Seen in Australia's Energy Sector
• Part 3: Fitch Sees Negative Outlook for Australian Upstream Projects in 2012