US LNG Projects Could Have Severe Impact on Australia

Boost in US LNG production and exports could have the biggest impact on the Australia LNG industry because of high costs of building new projects, said the Australian citing a Deloitte report.

The report commissioned by US LNG proponent Cheniere Energy, comes as global engineering contractor KBR -- a leader in West Australian projects -- says work on US LNG projects is starting to grow as work in Australia dwindles because of surging costs.

If a substantial amount of US LNG is exported to Asia, it could displace the equivalent of one $20 billion project in Australia, the Deloitte report on the global impact of US LNG exports said.

US exports, which are being made economic by a shale gas glut, would also weigh on LNG prices, the newspaper said quoting from the report.

"Australian LNG exports to Asia and Russian exports to Europe look particularly vulnerable, given their projected large volume of exports and high cost to markets they serve," said the report, entitled Exporting the American Renaissance.

The Deloitte study, without making forecasts of US LNG volumes, measures the effects that 47 million tonnes a year of US LNG would have on global trade, the Australian said.