PERTH (miningweekly.com) – Australia’s potential to compete as the world’s largest liquefied natural gas (LNG) supplier is under threat unless the country could remain competitive on costs, the Association of Australian Petroleum Production and Exploration (Appea) has warned.

Commenting on the International Energy Agency’s (IEA) ‘World Energy Outlook 2013’, Appea said that regulatory reform to address Australia’s sliding cost-competitiveness was now more important than ever.

The IEA report indicated that Australia’s gas production growth would see the nation rival Qatar as the world’s largest exporter of LNG by the year 2020, but only if plans to export are realised in full.

“Commitments to new resource developments in Australia have slowed markedly over the last year or so, and the prospects for another round of major Australian LNG projects will depend heavily on how costs evolve, on the deployment of new, potentially less costly technologies, such as floating LNG, and on competition from other regions, notably North America,” the report stated.

Appea CEO David Byers said that not only was there increased competition from North America, there were offshore developments in East Africa, and the IEA had identified the possibility of Russia expanding LNG export capacity to reach into the coveted markets of Asia.

“Australia has enormous potential supplies of natural gas but if we fail to harness the opportunity to remain competitive in global markets, further resources will remain undeveloped and jobs will be lost along with the potential for cheaper, cleaner energy and future tax revenues.”

The IEA further noted that more than two-thirds of current global investment in LNG was in Australia, where there were already three LNG export projects operating and a further seven under construction.

Worldwide, there are 12 LNG export plants under construction with a combined capacity of about 130-billion cubic metres a year.

New capacity was set to come into operation between 2015 and 2018, although the timetable is “heavily contingent on what happens in Australia, where 7 of the 12 terminals are located and where projects have seen cost escalations and delays”, the IEA stated.