Regional LNG: Australia eyeing America market

Australia should be able to help satisfy some of the expected strong demand growth for liquefied natural gas in the U.S., Mexico and Chile, Ian Macfarlane, Australia's industry and resources minister, said Friday as quoted by agency.

He suggested annual demand for LNG in the U.S. will grow to between 60 million metric tons and 100 million tons a year.

"We'll get a slice of that, add Californian to Mexican demand and top it up with Chile, you're talking about potential contracts of between 20 million and 30 million tons per annum on top of what we've already got," Macfarlane told Dow Jones Newswires in a telephone interview from San Francisco.

Macfarlane is scheduled later Friday to meet California's Lieutenant Governor Cruz Bustamante to discuss a slow-moving approvals process for BHP Billiton's (BHP) plan to import LNG into the U.S. West Coast via its Cabrillo Port venture.

The approvals process clock has stopped while a U.S. federal energy regulator assesses the "extraordinarily unlikely impact zone of the facility blowing up," the minister said.

Macfarlane intends inviting Bustamante to Australia so he can get first hand experience with LNG operations.

U.S. gas consumers are paying "an extraordinary price compared to what you can land LNG here for," the minister noted.

Macfarlane is on a week long swing through the Americas, which started last Friday in Chile and continued this week in Mexico and the U.S., meeting ministers and industry representatives to promote Australia's LNG interests, and its safety and security as a supplier.

Australia is already a major global LNG supplier from its expanding North West Shelf project, and its Darwin LNG project, scheduled for completion early in 2006, will produce 3.5 million tons/year.(*)