BHP signals growing US role in LNG sales to Asia
BHP Billiton says gas exports from North America could account for 11 per cent of Asian demand by 2030, but this will still be less than half the amount exported to the region by Australia.
It made the prediction at the start of a week-long update on its oil and gas division in Houston, where it is expected to reveal more about the future of its US shale business on Wednesday.
With significant gas interests in both continents, BHP is well placed to comment on the running debate over whether the modern gas boom in North America will hurt Australia by crowding out its prime export markets in Japan, Korea and the rest of North Asia.
BHP said the vast majority of the newly approved LNG export terminals in the US would send their gas to Asia, and by 2030 the nation should be exporting 11 billion cubic feet of gas per day.
When combined with smaller volumes from Canada, North America should be delivering about 11 per cent of Asia's gas requirement of 125 billion cubic feet per day by 2030.
Australia's share of the Asian demand is forecast to be 25 per cent in 2030, well behind the Middle East and Africa, which will jointly supply 40 per cent.
BHP's prediction of future US gas exports appears to be less ambitious than some other forecasts - British bank Barclays predicted earlier this year that the US could rival Australia's gas export volumes by 2025.
Credit Suisse believes it is possible that 8 billion cubic feet of US exports could hit the market by 2020, depending on whether Asian buyers were willing to continue paying higher prices than domestic buyers in the US.
"The US could be a significant supply point, but we need to think who the seller of the molecules is and what their motivations are," David Hewitt, one of Credit Suisse's top global oil and gas analysts, said. "The majority of the volumes sold would be sold by existing players in the LNG supply club."
Mr Hewitt said Australia would have no problem selling the LNG from plants currently being built, but it was unlikely to construct any new LNG export terminals.
"It has sold everything it is developing and I'm somewhat pessimistic as to how much more it will develop in the near term," he said, in a reference to the high cost and long times involved in implementing big projects in Australia.
BHP acquired $US20 billion worth of shale acreage in the southern states of the US in 2011, and has previously indicated it is closely considering the potential for gas exports, which were largely banned until recent years.
The sudden boom in gas production in the US has prompted five new export projects to be approved by the American government, and that export capacity is tipped to continue rising over the next two decades.
BHP said US gas exports to Mexico could also increase.
Closer to its traditional home, BHP is jointly developing the early stage Scarborough LNG project in Western Australia, and is a partner in the long-standing North-West Shelf development.
It has worked the Bass Strait oil and gas fields with ExxonMobil for close to 50 years, and is set to reap the benefits of rising domestic gas prices on Australia's east coast.
"We expect domestic pricing in eastern Australia to be influenced by global LNG markets, similar to Western Australia," it said in Houston.
On a macro level, BHP said developing economies such as China, India and a group of six south-east Asian nations were likely to drive energy demand in the world. People in developed countries were increasingly consuming less energy on a per capita basis, thanks to efficiency measures.