Australia’s LNG Advantage: A Strategic Pillar in China’s Energy Security

Bernadette Cullinane, Energy, Resources & Industrials Industry Leader at Deloitte Australia and President of the Energy Club of WA, delivered a powerful address at the 3rd Australia-China LNG Forum. Her message was clear: Australian LNG is not just a bridge fuel—it is a strategic cornerstone in ensuring energy security for China, while supporting global decarbonization goals.

LNG in the Headlines—and on the Policy Radar

Cullinane began by spotlighting recent developments from key industry players:

• Arrow Energy’s Surat Gas Project (Phase 2) is set to deliver 130 TJ/day to Australia’s east coast—highlighting the increasing urgency to secure domestic supply amid rising demand.

• Woodside’s North West Shelf extension to 2070 represents a pivotal move for one of the world’s largest LNG facilities, pending final federal approval.

• Santos’ Moomba CCS project, now operational, joins Chevron’s Gorgon CCS as Australia’s leading carbon capture ventures—underscoring Australia’s commitment to reducing LNG lifecycle emissions.

LNG: From Niche Fuel to Global Powerhouse

Cullinane reflected on LNG’s rise from a “boutique fuel” 16 years ago to a global mainstay. In 2023, global LNG trade reached 401.4 million tonnes, with Australia consistently among the top three exporters alongside the U.S. and Qatar. Notably, 34.2% of China’s LNG imports in 2024 came from Australia.

As Asia remains the primary growth engine for global LNG demand, Australia’s geographic proximity, reliability, and modern infrastructure make it a critical supplier.

China’s Energy Mix: LNG Gaining Ground

China’s energy imports of coal, crude oil, and natural gas have all surged since 2015, with natural gas imports rising 2.5 times. Though coal and petroleum still dominate, LNG plays a growing role in China’s energy security and decarbonization:

• The 14th Five-Year Plan targets an 18% CO₂ reduction and a 20% non-fossil energy share by 2025.

• The upcoming 15th Five-Year Plan is expected to reinforce LNG’s role as a stabilizing transition fuel and explore reduced coal reliance, expanded nuclear energy, and more robust domestic vs. import energy strategies.

Cullinane noted that China is increasingly favoring long-term LNG contracts, marking a shift from its prior reliance on short-term and spot markets. This reflects a broader emphasis on energy security, in line with global geopolitical uncertainty.

Policy Landscape: Gas Strategy Under the Spotlight

Cullinane outlined Australia’s evolving gas policy environment:

• The Future Gas Strategy (2024) confirms gas as essential for Australia’s energy security and export commitments.

• Mechanisms like the Domestic Gas Security Mechanism, the Heads of Agreement on East Coast Gas, and gas price caps aim to balance domestic affordability with export reliability.

• Regulatory reforms, such as Australia’s Safeguard Mechanism, require major emitters to reduce emissions by 5% annually—creating further momentum for carbon capture, electrification, and AI-driven optimization in LNG operations.

LNG + AI: A New Frontier

Cullinane emphasized how artificial intelligence is poised to transform energy production and emissions reduction, noting China’s rapid advancements in AI. She suggested bilateral partnerships in carbon capture, digital optimization, and emissions tracking could offer mutual commercial and climate benefits.

Investment Landscape: Young, Clean, and Advanced

 Australia’s LNG infrastructure is modern and technologically advanced—80% of capacity is less than 15 years old, minimizing methane leakage and optimizing operational efficiency. Projects like Browse, Scarborough, and Pluto 2 continue to attract global interest, including investments from Chinese firms such as PetroChina and CNOOC in joint ventures like Arrow Energy.

Interestingly, Cullinane flagged a paradox: While Australia is a top LNG exporter, LNG import terminals are now under construction on the east coast to meet rising local demand—highlighting the complex balancing act between export commitments and domestic energy security.

Conclusion: A Reliable Partner for a Net-Zero Future

 Cullinane closed with a compelling call to action:

“Australia is a reliable, stable, and safe LNG supplier. Our infrastructure is world-class. Our policy now aligns with our ambitions. And our long-standing relationship with China remains essential—not only for energy trade but for shared decarbonization goals on the road to net zero.”

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