Australia's liquefied natural gas(LNG) supply may be heating up just as prices of the commodity are hovering around 18-year-lows, but the outlook for the industry is still solid, an Australian minister suggests.
A record $200 billion has been poured into Australia LNG production in the last decade, with the country set to overtake Qatar as the world largest LNG exporter by 2020. LNG is a natural gas, mostly methane, that has been cooled until it becomes liquid for easier transport and storage. It is a cleaner-burning fossil fuel than rivals coal and oil.
But even though these mega-projects are coming online amid the price slump, that shouldn't dent expectations for the industry's outlook, said Josh Frydenberg, Australia's minister for resources, energy and Northern Australia.
"I think people are very positive about its future and that's driven by what I call the mega-trends in demographics: The increase in population particularly in Asia, the growing middle classes, the increase in urbanization -- all that is driving a greater demand for gas," Frydenberg said on the sidelines of an industry conference in Perth.
But just because demand for LNG may pick up, industry players weren't entirely certain that would benefit Australian players in the sector.