LNG opportunities fuelling Aust economic boom: report

26/06/2012 - Australia is headed for an economic boom fuelled by burgeoning liquefied natural gas (LNG) investment, a new report shows.

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With more than half of the world's LNG projects under construction in Australia, the economic consequences will be overwhelming positive, the report has found.

An analysis by Deloitte Access Economics says in 2010/11 the oil and gas industry's production represented around two per cent of current gross domestic product (GDP), adding $28.3 billion to the economy.

However, that amount is projected to peak to around $65 billion in 2020 and be at $60 billion in 2025, driven by the rapid growth in installed capacity.

In 2020, when production and prices are expected to peak, the industry's total economic contribution is projected to be around 3.5 per cent of the national economy.

"This report demonstrates how Australia's gas industry has become a crucial driver of national prosperity," said Australian Petroleum Production & Exploration Association (APPEA) chief executive David Byers, who commissioned the report.

"Rather than having dire impacts upon other industries, or being responsible for the 'hollowing out' of other sectors, the report shows the benefits of this enormous LNG investment flow far and wide."

There are $185 billion worth of oil and gas projects under construction or at the advanced stages of planning and approval, and they represent over a third of all business investment.

All seven LNG projects currently under development in Australia are larger than the Snowy Mountain hydroelectric scheme built between 1949 and 1974, which in today's dollars would be around $8 billion.

The Gorgon LNG project is five times as large.

Byers said the continued expansion of the oil and gas industry represents "incredible opportunities" for all Australians.

"We should be capitalising on these opportunities and maximising growth in living standards and employment by efficiently allocating resources," he said.

However, he said the ongoing development of the oil and gas sector should not be taken for granted.

Continued access to overseas labour markets through schemes such as Enterprise Migration Agreements is vital, he added.

Source: AAP

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