US to target Asia gas exports: BHP
BHP Billiton expects gas exports from North America will supply 11 per cent of Asian demand by 2030, but still be less than half the amount exported to the region by Australia.
The prediction was made by the resources company at the start of a week-long update on its oil and gas division in Houston, which is expected to see it 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 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 the 125 billion cubic feet per day of gas demand in Asia by 2030.
Australia's share of Asian demand was 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 US gas exports appears to be less ambitious than some others, with British bank Barclays saying earlier this year that the US may 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 US buyers.
"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. The majority of the volumes sold would be sold by existing players in the LNG supply club," said David Hewitt, one of Credit Suisse's top global oil and gas analysts.
He said Australia would have no problem selling the LNG it now has under construction, but was unlikely to build further export facilities. "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 building major projects in Australia.
BHP acquired $US20 billion of shale acreage in the US's southern states in 2011, and has previously indicated it is considering the potential for gas exports, 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 US government, and that export capacity is tipped to continue rising over the next two decades.
BHP said US gas exports to Mexico should also increase.
BHP is jointly developing the early stage Scarborough LNG project in WA and is a partner in the North-West Shelf development.