CAMBRIDGE Energy Research Associates (CERA) says Australia may see the closure of more coal mines due to a surge in shipments of liquefied natural gas (LNG) from the Middle East into Europe and North America.
CERA forecasts LNG capacity will increase by 30% over by 2011. It suggests the gas market will see a surge in LNG output from Indonesia, Russia, Yemen and Qatar.
Gas has been chasing down the coal price. Many believe the gas price could begin to test the marginal cost of coal production.
Industry officials say there is an oversupply of coal in the system and over the next year gas prices will fall beneath coal.
The fall in LNG has been attributed to the recession in the Far East, a long-awaited build-up in new supplies of LNG and unexpected discoveries of new gas reserves in the United States.
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