Qatars status as the worlds largest exporter of liquefied natural gas (LNG) is set to be challenged when Australia starts exporting huge volumes in 2016.
Australia is aiming for a capacity of 80 million tonnes a year (t/y) which will overtake Qatars 77million t/y and propel the country into the top spot.
However, Australias journey to become a world scale LNG exporter has certainly been a rather bumpier ride than the one experienced by Doha.
Australia has got the gas, but its fields are far smaller than Qatars North Field, the worlds largest non-associated gas field. Access to the fields and therefore the gas is also more difficult than anything Qatar Petroleum has to worry about, the North Field offers some of the cheapest and easy to access gas anywhere.
The project spending for some of Australias blue-ribbon LNG schemes was large enough to begin with, but has now ballooned to extraordinary lengths. The Gorgon LNG project being executed by the US Chevron has witnessed costs rise by $17bn to $54bn.
This means that Chevron and all of the other major LNG players in Australia will be hoping that prices in Asia remain at the $16 per million BTU level. If they drop then the economies of scale of these schemes will begin to look extremely shaky.
All of this will not have gone unnoticed in Doha and even though Australia might start exporting larger volumes of LNG, it will never get remotely close to Qatars profit margins.