Natural gas

Abstract

Global demand for natural gas has grown rapidly in recent years. This has translated to increased demand for Liquefied Natural Gas (LNG) in the Asia Pacific region, where LNG imports are the primary source of gas in some countries. Gas production in Australia has increased steadily over the past two decades to around 44 billion cubic metres in 2007-08. While the domestic market absorbs around 50 per cent of gas production, Australia is one of the largest LNG exporters in the Asia Pacific region. For these reasons the focus of this note is on LNG. In 2008, LNG trade is estimated to have increased by around 8 per cent to 186 million tonnes. This rate of growth is consistent with the longer term trend since 2000. Increased LNG trade has been driven by an increase in the uptake of natural gas for electricity generation and increased natural gas consumption in industrial and residential sectors of many economies, particularly in Europe and Asia. Increased consumption of natural gas also reflects a number of policy priorities including reducing greenhouse gas emissions, enhancing energy security, and ensuring a diversified fuel mix. In a number of countries where these policies are being pursued there is insufficient production of natural gas, requiring natural gas to be imported primarily in the form of LNG.