logo

HI5003 - Economics - Demand and Supply of LNG in Australia

7 Pages1463 Words43 Views
   

Holmes Institute Sydney

   

HI5003 Economics for Business (HI5003)

   

Added on  2020-03-13

About This Document

In this document, we will discuss the increase in global demand and supply challenges in the long-term, the LNG prices in Australia have been forecasted to rise. There are several risk factors associated with the supply side. Due to an increase in the numbers of global competitors and a reduction in the investment in the Australian oil and gas sector, the LNG projects in Australia are anticipated to decline.

HI5003 - Economics - Demand and Supply of LNG in Australia

   

Holmes Institute Sydney

   

HI5003 Economics for Business (HI5003)

   Added on 2020-03-13

ShareRelated Documents
ECONOMICS OF BUSINESS 1Demand and Supply of LNG in AustraliaStudent’s NameCourse IDUniversityDate
HI5003 - Economics - Demand and Supply of LNG in Australia_1
ECONOMICS OF BUSINESS 2Demand and supply of a commodity can be identified as two of the major constituents affecting the prices of the same. Precisely, the demand and supply side of commodities has also depended on a number of factors regulating the prices to change. In this particular study, the impact of increasing international demand for liquefied natural gas (LNG) on the prices in Australia has been elaborated providing substantial evidence (Rudolph, 2016). According to the reports, by 2021-22, the entire value of the LNG exports in Australia has been estimated to reach$42 billion from $17 billion in 2015-16 (Drahos, 2017).The report published by the Australian Government in the article ‘Resource and Energy Quarterly’ has confirmed that due to the increase in global demand and supply challenges in the long-term, the LNG prices in Australia have been forecasted to rise. In the meanwhile, the surge in the future contract prices can be identified as one of the leading drivers of surging the commodity price (Perry, 2016). On the other side, there are several risk factors associated with supply side as well (Bolle, 2011). Due to increase in the numbers of global competitors and reduction in the investment in the Australian oil and gas sector, the LNG projects in Australia areanticipated to decline. In terms of LNG demand from the global side, the international gas consumption is expected to surge at an average annual rate of 1.7% in the next five years or so (Drahos, 2017). Due to increased demand from the emerging economies in Asia and the European Union nations,the LNG export infrastructure will get a boost in the Australia and US to meet the supply growth.In the meanwhile, LNG imports forecasts till 2022 have been presented as below:
HI5003 - Economics - Demand and Supply of LNG in Australia_2
ECONOMICS OF BUSINESS 3Figure: LNG Imports ForecastsSource: (Drahos, 2017)As described in the figure, excluding Japan, the forecast has confirmed that the demand of LNG is expected to increase from South Korea, China, emerging Asian economies, Europe, and the rest of the world economies. In terms of numbers, by 2022, the consumption forecast of LNG is expected to reach 330 billion cubic metres, up by 65%. Therefore, import of LNG in China will rise to 48 million tonnes by 2020, up by 19% (Drahos, 2017). Evidently, China will be the largest LNG importing nations in the world contributing towards the demand growth of the resource in a single handed way. Furthermore, import of LNG from emerging Asian economies i.e. India, Afghanistan, and Pakistan, etc. has estimated to increase that will evidently benefits the Australian exports. As a result of the consequences, the prices of LNG in Australia will maintain an upward curve in the future as well. Irrespective of Australia being the second largest exporter of LNG across the globe, it is expected to face a shortage of supply of natural gas in the upcoming years. According to Bruce
HI5003 - Economics - Demand and Supply of LNG in Australia_3

End of preview

Want to access all the pages? Upload your documents or become a member.

Related Documents
HI5003 - Demand and Supply of Coal in Australia
|6
|1393
|55

Demand and Supply of Coal in Australia
|6
|1163
|190

Asia Pacific Business Perspective - Assignment - HBI 560
|7
|1563
|102

ECONOMICS FOR BUSINESS 7 7 Economics for Business Name of the University Course ID
|8
|1472
|104

HI5003 - Economics for Business assignment
|7
|1570
|43

BUS102 - Economics for Business - Assignment
|6
|1440
|63