With the demand for liquefied natural gas (LNG) on the rise in Asia, Australian Energy Producers, representing Australia’s upstream oil and gas exploration and production industry, is convinced that Australian gas has the opportunity to be a major piece of the Asia-Pacific’s emissions reductions and energy security puzzles.
As Rystad Energy recently said that LNG demand in Asia could almost double by 2032, Australian Energy Producers highlighted the importance of Australian gas exports for energy security and emissions reductions while reiterating its warnings about the country’s need to work to restore its reputation as a reliable investment partner to benefit from soaring LNG demand in the Asia-Pacific.
According to Rystad Energy, LNG demand in the region will increase from 252 mtpa in 2022 to 450 mtpa by 2032, thus, Australian projects with their proximate location and legacy relationships remain attractive for Asian buyers, with the largest source of demand expected to be coming from China followed by Southeast Asia and South Asia while legacy markets in Japan and Korea would still see new buyers emerge.
This is in line with Xodus’ view that the partnership between Japan and Australia strengthened Indo-Pacific political dynamics, bolstered energy security, and advanced carbon capture utilization and storage (CCUS) and low-carbon hydrogen development. This energy consultancy believes that the strategic partnership between Australia and Japan holds “immense potential in advancing the energy transition in the Indo-Pacific.”
Xodus also pinpoints Australia’s remaining challenge to ensure it is seen as a reliable investment partner amidst recent government interventions. With this at the forefront, Samantha McCulloch , Australian Energy Producers’ Chief Executive, described LNG as a key economic and emission reduction opportunity given the plethora of strong Asian demand forecasts.
“New export projects are critical in delivering economic benefits such as the estimated $17 billion of government receipts this financial year and $41 billion of industry spending in Australia. Our LNG can also reduce emissions in importing nations by enabling the switch from other fuels,” added McCulloch.
Australia’s decarbonization potential was also recently outlined by Wood Mackenzie, which emphasized that the country could unlock up to $600 billion in revenue by creating a carbon capture and storage (CCS) industry and becoming a storage hub for the Asia-Pacific region.
To take advantage of its CCS potential, Australia passed laws last year permitting the international transport and offshore storage of CO 2 and the 2024-25 Federal Budget committed $32.6 million to support regional cooperation and establish the regulatory frameworks needed to enable CO 2 imports and exports.
“Net zero is not just a challenge, it’s an opportunity – and it’s a huge economic opportunity for Australia. CCS can attract new investment, new revenues and new jobs in a new net zero industry. Australia knows how to be a resources and energy powerhouse and has built a gas industry that is the envy of the world. Now it can become a decarbonisation powerhouse,” concluded McCulloch.