2015 is expected to be a massive year for the coal seam gas industry, but mining and construction machinery manufacturing is set to suffer.
That’s the prediction from IBISWorld which has compiled a list of the industries set to rise and fall in 2015.
Industry revenue from coal seam gas is expected to skyrocket by 148 per cent over the next year to reach $1.83 billion.
IBISWorld said the CSG industry is currently undergoing a significant transformation.
It said while CSG projects have become more viable due to new and improving extraction techniques, it is the continuing development of export capabilities that will drive rapid industry growth.
Last week, Australia’s first shipment of gas from the QCLNG gas plant left Curtis Island bound for Singapore.
The project milestone marked the successful commissioning and testing of QCLNG’s Train 1.
The QCLNG Train 2 is expected to start production in the third quarter of 2015, which will bring production to a plateau of 8 million tonnes of LNG per year.
QCLNG is just one of three multi-billion LNG plants being constructed on the island.
APLNG and GLNG are expected to start producing later this year.
IBISWorld senior industry analyst David Whytcross said this will come as a boost to operators of newly developed coal seam gas fields in the Cooper Basin.
“The opening of the domestic east coast gas market to the international market is expected to push gas prices higher – particularly as Australia is well-positioned to meet strong demand from Japan, China and South Korea, which are the world’s three largest natural gas importers,” Whytcross said.
The news is not as optimistic for the mining and construction manufacturing industry which is expected to decline this year.
IBISWorld predicts demand for mining machinery will fall, leading to a forecast revenue decline of 6.1 per cent over 2015.
“The development of new mines, and the expansion of existing mines, generally requires mining firms to purchase new machinery, leading to revenue growth for mining machinery manufacturers,” Whytcross said.
Job cuts and profit downgrades by mining machinery manufacturers in 2014 is evidence of this shift.