Commodity forecaster ABARE has suggested that billions of dollars of LNG investment projects may be put on hold as excesses could reach between 15 million and 35 million tonnes by 2015.

ABARE said that world LNG trade was around 106 million tonnes in 2001, with Japan, Korea and Taiwan accounting for about 72%. Malaysia and Indonesia had more than half the market and the middle East about 20%. Australia, through the North West Shelf gas project, had around 14% of the Japanese market.

However, the Australian Liquefied Natural Gas consortium last year signed a $25 billion, 25 year deal to supply 3.25 million tonnes of LNG to a new plant to be built in Shekou in the Guangdong province.

The Chinese are now also considering another power station in the province that could see demands for up to 300,000 tonnes a year, worth around $90 million dollars. The original contract signed by the Australia Gas group allows for upward flexibility although the Chinese are still in the proposal stage for the plant.

The deal would ease Australian concerns about excess supplies, however, there may be some nervous shuffling among the Gorgon Venture marketers looking to come online towards the end of the decade.