It is Australia’s biggest trade deal ever. When China National Offshore Oil Corporation (CNOOC) signed a 20-year agreement with BG Group to buy 3.6 million metric tons of Liquefied Natural Gas (LNG) a year from Queensland State, it marked not only a mammoth trade deal, but also showcased Australia’s growing status as one of the world’s richest sources of energy. And at the heart of the deal stands Queensland State. With this new energy boom, the Sunshine State is now rebranding itself as the Smart State: a ‘state where knowledge, creativity and innovation can flourish.’
As Colin Barnett, the premier of Western Australia State told ABC News, “We have what the world, and particularly, the rapidly growing economies of Asia want – iron ore, energy and minerals.” Indeed. Add gas to that, especially coal-seam gas, which is what BG Group and CNOOC are buying. Coal-seam gas is methane gas stored within coal seams, and production of this energy source has become an important part of Queensland’s economic landscape. The gas is also particularly prized as being more environment friendly, producing around 50% less carbon dioxide.
Australia’s surprising resilience during the global recession was attributed mainly due to China’s voracious demand for the very same natural resources that Colin Barnett is talking about. China’s appetite helped the Australian economy recover faster than any other developed nation and emerge stronger and more confident than seemingly more powerful members of the developed world, including the U.S., Germany or Japan. And before the BG-CNOOC pact, there was the $41 billion deal between PetroChina and ExxonMobil for LNG from the Gorgon gas project. Apart from that, there are nearly a dozen other gas projects, including a plan to tap into the Browse fields by Australian company, Woodside. Along with the BG-CNOOC agreement this week, there was also news that Shell and PetroChina are involved in a $3.1 billion joint bid to takeover coal-seam gas company, Arrow Energy.
With all this frenetic activity, Western Australia, including Queensland, is booming like never before. Workers are in demand and companies are often forced to pay six-figure salary wages for even truck drivers. Houses sell at a premium here and new offices sprout up almost every day. It is a phenomenon that is often compared to Australia’s own gold rush in the 19th century.
Right now though, apart from iron ore, LNG is the new gold. As Asia’s booming economy no doubt continues to expand, Australia may soon move to the realm of an ‘energy superpower.’ That’s a term often applied to Russia. But these past few days, and indeed the past few years, have shown that Australia might well be on the way to making that title all its own.
Postcards from Around the World
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