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Australian LNG under pressure

A global supply glut, cheaper rivals and tightening emissions policies are a growing problem for Australia’s costly gas-export plants

At least two of Australia's new liquefied natural gas-export facilities in Queensland may run under capacity until global demand exceeds supply around 2022. Even then, the need for their product might be less than thought. Changing buyer needs, an unanticipated shortage of onshore coal-bed methane (CBM) to supply the trains, and possible federal intervention to restrict exports in preference for eastern Australia's tightening domestic market could see plants run under nameplate capacity for some years. Longer term, cheaper LNG and the adoption of clean technologies could strand the high-priced Queensland assets altogether. Matt Howell, senior research analyst for consultancy Wood Mackenzie

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