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Australia's drive to overtake Qatar as the world's biggest exporter of liquefied natural gas is being underpinned by a resource of around 390 trillion cubic feet of natural gas, which could double in size if exploration for shale gas is successful, Minister for Energy and Resources Martin Ferguson said Monday.
More than US$175 billion is being invested in new liquefied natural gas, or LNG, projects in Australia to capitalize on fast-growing demand for cleaner-burning fuels in Asian economies such as China as they look for alternatives to burning dirty coal for power.
A study by government body Geoscience Australia ranks natural gas as Australia's third-largest energy resource behind coal and uranium, and finds that there is a big enough resource Down Under to maintain current gas production rates for 184 years.
The report also finds Australia is likely to have significant shale gas resources, mainly located in the Australian Outback.
"While exploration for shale gas in Australia has only recently commenced and resources are poorly understood, shale gas could potentially double Australia's gas resources," Mr. Ferguson said.
Companies including Beach Energy Ltd. (BCHEY, BPT.AU) and AWE Ltd. (AWE.AU) plan or have started drilling campaigns to search for shale gas, including in the Cooper Basin--an area the size of Mississippi that straddles South Australia and Queensland states. They hope interest in shale gas will take off as sharply as Queensland's coal seam gas industry, which attracted as much as A$20 billion in investment from the likes of ConocoPhillips (COP) and BG Group PLC (BRGYY, BG.LN) in 2008 alone.
"Already, Australia is a respected player in the global energy trade exporting 20 million tons of LNG valued at A$10.4 billion in 2010-11. This is forecast to grow by a further 19% in 2012-13 as production from the Pluto facility in Western Australia ramps up," Mr. Ferguson said at the annual Australian Petroleum Production and Exploration Association, or Appea, conference here.
The A$14.9 billion Pluto project, majority owned and operated by Woodside Petroleum Ltd. (WOPEY, WPL.AU), is due to ship its first LNG cargo imminently. It will herald the start of several more multibillion dollar projects between now and 2017, including the Wheatstone and Gorgon projects led by Chevron Corp. (CVX), assuming their are no delays due to gathering headwinds such as labor and materials costs.
-By David Winning, Dow Jones Newswires; +61-2-82724688; firstname.lastname@example.org
-Ross Kelly contributed to this story.