LNG to replace iron ore

A recent HSBC trade forecast has predicted Liquefied Natural Gas will replace Iron Ore as Australia's main export by 2030. It's expected LNG will constitute a massive 20% of Australia's export growth by this time. The demand for LNG is being diven by the growth of the Asian middle class.

And, it's not all about China buying the resources. Oxford Economics has predicted trade export growth to Indonesia will be 5% a year and Vietnam more than 8% annually. Malaysia's economic importance to us will also grow, it's suggested. This is combined with the existing very strong links with India, China Japan, South Korea and India.

On the domestic front east coast annual gas demand is expected to triple by 2017, causing tension with the developers of new mega liquefied natural gas (LNG) projects who want to export offshore and lift prices. Santos Ltd has already said it is selling gas into eastern Australia at $9 per gigajoule, confirming previous analyst predictions that LNG exports would push up prices from just $3/G.