Australia to rival Qatar in LNG exports by 2016

By 2016, Australia would rival Qatar as the largest LNG exporter at the current pace of growth. However, analysts say, while extracting the gas is one thing, extracting long-term economic benefits is another.

Top players in LNG assembled today at the Australian Resources Conference, to discuss how to dig deeper and address a host of issues, including peaking investment, soaring labour costs and a threat of global competition for the Asian markets.

Meanwhile, according to the Wall Street Journal, at Chevron Corp's Gorgon project, a budget blowout seems to be in the pipeline. Amid the general uncertainty about the budget for the massive liquefied-natural-gas project, the only thing that seems to be certain is that nobody seems to know how much it would cost, according to the newspaper.

The LNG processing plant off the Western Australia coast also has Exxon and Royal Dutch Shell as major investors, according to the report.

At the time of the project's approval in September 2009, it was initially slated to cost $44.9 billion, but analysts say the final bill would be much higher. Today amid concerns over increasing costs, Chevron said it was still working on its Gorgon budget assumptions.

Costs on other LNG projects in Australia have been soaring, too. Exxon Mobil, Oil Search and Santos said this week the budget for a new natural gas export facility in Papua New Guinea had soared 21 per cent from previous estimates to $19 billion. In May, BG Group said the cost of its gas project in Queensland would be 36 per cent higher at $20.4 billion, while in June, Santos said the budget on its Queensland gas-export venture with Total SA, Petronas and Korea Gas Corp would be 15.6 per cent higher than previously at $18.5 billion.