Much of Australia's investment thesis has come from commodities. The Asian-Pacific nation features vast reserves of metals, coal and other key natural resources needed to fuel the emerging world's fast-paced infrastructure build-outs and economic growth. Likewise, its proximity to the nations makes it a go-to exporter of raw materials. Funds like the WisdomTree Australia Dividend ETF (ARCA:AUSE) have become popular ways to play emerging Asia's supermarket. As good as Australia's commodity thesis already is, a recent report could make it stronger. The nation is poised to be a shale gas superstar.

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A Doubling of Reserves
Currently, Australia has around 390 trillion cubic feet (Tcf) in conventional gas resources, ranking third behind coal and uranium as the country's largest energy resources. However, a recent report by Geoscience Australia and the Australian Bureau of Resources and Energy Economics could change all that.

The report estimates that Australia's mid-continent shale and unconventional resources could contain upwards of an additional 400 Tcf worth of natural gas. This will allow the nation roughly double its natural gas reserves and could spark Australia's next wave of energy growth after the country's booming coal seam gas industry. The U.S. Energy Information Administration estimates that Australia has the sixth-largest shale gas reserves, behind the U.S. and China.

The news is also a huge win for Australia's exporting capacity. Already, the down-under nation is a leader in liquefied natural gas (LNG) exports, with more than 20 million tons of LNG worth $10.47 billion shipped last year. Nonetheless, nation is working hard to expand on that number. More than $170 billion in new LNG projects are currently underway in Australia and exports are set to grow 19% in 2012 as Woodside Petroleum (OTCBB:WOPEY) new Pluto LNG project comes online. Overall, analysts at major integrated oil major Exxon Mobil (NYSE:XOM) predict that Australia will surpass Qatar as the world's top LNG exporter by the end of the decade.

Ultimately, the recent report helps underscore Australia's long-term potential as the world's leading LNG exporter and could give U.S. projects like Cheniere Energy Partner's (NYSE:CQP) Sabine Pass facility a run for its money.

SEE: Oil And Gas Industry Primer

Playing Australia's Good Fortune
With Australia's shale revolution just beginning, investors have the ability to get in on the ground floor. The previously mentioned, WisdomTree fund, along with the iShares MSCI Australia Index (ARCA:EWA) can be used as proxies for the entire nation's economy. However, for those who want to play Australia's shale ambitions, there are plenty of options as well.

Fresh off its refining spin-off, ConocoPhillips (NYSE:COP) has its eye on Australia's shale bounty. Last year, the company partnered with Perth-based New Standard Energy to explore the nation's Canning Basin for shale gas as it built a new LNG exporting facility in the Northern Territory. Conoco recently announced that it has plans to acquire more acreage in the region to try to adopt a first-mover edge in Australia's new shale future. Likewise, both Hess (NYSE:HES) and BHP Billiton (NYSE:BHP, BBL) have begun the task of securing acreage in the nation before it gets prohibitively expensive.

Perhaps one of the best ways to play Australia's shale future is through the massive Gorgon LNG project. The field is estimated to be one of the nation's largest, at nearly 40 Tcf worth of gas. Majority owner Chevron (NYSE:CVX), along with partner Royal Dutch Shell (NYSE:RDS.A, RDS.B) are nearly 40% complete with construction and the project remains on track to ship its first LNG cargo in 2014. Chevron's neighboring Wheatstone facility will begin LNG exports in 2016. Already, the facility has racked-up impressive long-term contracts for its LNG exports, with a variety of Japanese utilities.

SEE: The Industry Handbook: The Oil Services Industry

The Bottom Line
Investment in Australia has always been about the nation's commodity story and that story is about to get sweeter. A recent report predicts that the nation's unconventional and shale gas resources will nearly double its total natural gas reserves. That will mean big profits for E&P firms in the nation, as well as firms in its LNG industry. For investors, the time is right to bet on the nation's shale future.

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At the time of writing, Aaron Levitt did not own shares in any of the companies mentioned in this article.



Tickers in this Article: AUSE, WOPEY.PK, XOM, CQP, EAW, COP, HES, BHP, BBL, CVX, RDS-A, RDS-B

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