This paper will evaluate the importance of continued Australian liquefied natural gas (LNG) exports to the energy security markets of the Asia-Pacific, namely Japan, South Korea, and Taiwan. We assert that despite the general discussions around regulatory difficulties, Australian LNG holds a crucial ‘geostrategic’ position in their energy procurement strategies, ‘- from a like-minded rules-based regime, at less than 10 days’ sailing distance, and without chokepoints or transits through disputed territory. This makes Australia one of the few geostrategic sources of LNG around the world all of which must be incentivized to sustain production in this era of energy security. The paper will discuss the outlook for LNG demand in Japan, South Korea, and Taiwan in the context of their own energy transition amidst climbing power demand from AI and associated industries. With existing contracts rolling off in the 2030s, these markets will have a supply deficit of over 74 Million tonnes in 2035, demonstrating ample capacity to absorb more production from Australia. We will also present our methodology of evaluating the ‘geostrategic’ premium of Australian LNG which allows producers here to extract higher-than-market prices due to the certainty of supply and proximity to key demand centres.
Ramesh et al. (Thu,) studied this question.