Investment in the Australian resources sector has reached an all-time high of A$268.4-billion, with liquefied natural gas (LNG), gas and petroleum projects accounting for the majority of the record investment.
LNG, oil and gas investments total A$195-billion, the Bureau of Resources and Energy Economics (BREE) stated in its `Resources and Energy Major Projects””October 2012` report.
Martin Ferguson (Federal Resources and Energy Minister) welcomed the strong project pipeline, which achieved a 3 per cent growth from April 2012.
“To put Australia’s investment in oil and gas in perspective, in today’s prices, the total committed expenditure on these projects is equal to the cost of the Apollo Moon Programme.” Ferguson said.
The report states that 87 projects are committed to development, of which 51 were minerals based, with 18 gas and petroleum and 18 infrastructure projects. Furthermore, 277 projects were in the planning stages.
BREE executive director and chief economist Professor Quentin Grafton said 11 mega projects, each with an investment of more than A$5-billion, accounted for A$201-billion, or 76 per cent, of the total committed investment in resources and energy major projects. Most of these mega investments were LNG projects located in the Pilbara region of Western Australia and Gladstone, in Queensland.
In the six months to October 2012, 10 projects, worth A$13.2-billion, were committed to after investment was approved. The largest of the projects was for an additional LNG train at the Australia Pacific LNG plant at Gladstone.
Ferguson said that despite weaker commodity prices, the report showed Australia had a solid pipeline of potential investment in resources and energy.
“In the face of lower commodity prices, the delivery of this pipeline of projects is contingent on keeping production costs down, providing access to skilled labour and increasing our productivity and efficiency.”ť
Grafton also noted that any substantial net increase to the dollar value of committed projects would require either cost increases to larger, existing projects and or a new final investment decision on a large project within the coming year.
Ferguson said the Australian government was collaborating with the resources industry to make certain Australia remained competitive, and would continue to attract investment in one of its most valuable sectors.
Resource sector investment reaches an all-time high