More LNG DAEGU, South Korea, Oct 17 (Reuters) - North America has pushed Australia out of the top spot for new Asian investment in gas development, with most of the supply from existing Australian projects sold off and buyers hunting for cheaper fuel, industry executives said this week.
Australia has been for the past several years the global hotspot for Asian gas investors, with $190 billion in liquefied natural gas (LNG) developments under way to take advantage of its proximity to top buyers such as Japan and South Korea.
But its seven current projects have been parcelled out to off-takers and equity stakeholders, and no new projects are expected to move forward within the next year.
That slowdown and the pull of cheap, abundant North American shale gas has turned heads towards projects just setting up for development in the United States and Canada that are aiming to fill Asia's still burgeoning LNG demand.
"The cost of Australian grassroot projects is going up ... so probably we need to pause," said Shigeru Muraki, chief executive of the energy solution division at Tokyo Gas, speaking at the World Energy Conference in South Korea.
"We're now moving to the U.S. We've already invested in two gas fields - one in Dallas and the other in Canada."
A spate of approvals on U.S. gas export projects, about 50 million tonnes a year of capacity, has removed some of the uncertainty over its LNG supplies, while Canada's vast potential is attracting rising numbers of Asian buyers and investors.
Japanese power monopolies will build 12 gas-fired power plants next year as Tokyo struggles to make up for a shutdown of nuclear reactors. South Korea, amid its own safety scandal, is also looking to cut dependence on nuclear power, which would further boost its gas demand.
Other LNG buyers such as Thailand's PTT Pcl are emerging in Southeast Asia as countries try to diversify away from oil and coal, and as regional output growth fails to keep up with domestic requirements.
CANADA PLAY
Malaysia's state oil firm Petronas recently became Canada's largest foreign direct investor with its $35 billion plan to develop shale gas assets and build an LNG export terminal in British Columbia.
"We're two-and-a-half days closer to Asia, as far as shipping is concerned. Our ambient temperature is a lot cooler than anywhere else in the world, so it takes less energy to make LNG in British Columbia than anywhere else," said Rich Coleman, British Columbia minister for natural gas development, speaking on the province's market advantages.
TransCanada Corp, which is planning to build pipelines to transport Canadian gas to two LNG export projects, said its participation in projects honing in on Asia's fast-growing demand ramped up suddenly.
"I would have never predicted that 24-36 months ago," TransCanada chief executive Russ Girling said, commenting on his company participating in Asia-focused projects worth some C$14 billion ($13.53 billion).
Besides Petronas, the two LNG projects to be fed by Transcanada pipelines involve investments from Korea Gas Corp , Mitsubishi Corp and PetroChina Co Ltd .
British Columbia, the Canadian province with the most gas developments under way, has already attracted around $100 billion of investment so far with three major LNG projects, Minister Coleman said.