Australia is on track to become the world's biggest supplier of liquefied natural gas, overtaking Qatar, perhaps as soon as 2017. Our LNG boom is happening all over: from Chevron's $43 billion Gorgon project at Western Australia's Barrow Island (the country's biggest resource project, ever), to Woodside's $35 billion Browse project on the Kimberley coast, to Inpex's $US34 billion ($32.4 billion) Ichthys project at Darwin and on to Queensland, where coal seam gas for export has taken off. Woodside and Oil Search also plan big projects in the Timor Sea and Papua New Guinea. In total, well over $200 billion of LNG projects are in the pipeline.

These LNG projects are being launched into an increasingly competitive gas market as the United States lurches towards an oversupply, courtesy of new drilling techniques for unconventional resources such as shale gas which promise to deliver energy independence and may turn the country into a significant LNG exporter.

In Australia, unconventional drilling has so far focused on coal seam gas (although we have potentially vast shale gas reserves as well). Coal seam gas took off in Queensland from 2000, mandated by then premier Peter Beattie, and accounts for 90 per cent of the state's gas supply. What's new is the rapid scale-up of four massive projects to pipe the gas from the Surat and Bowen basins to Curtis Island, at Gladstone, where it will be cooled into liquid and shipped overseas. The hundreds of coal seam gas wells now will become tens of thousands.

Eoin Treacy's view It has been the view at Fullermoney since 2008 that natural gas is a game changer for the energy sector. It is abundant, cheap, cleaner than oil and some of the world's largest reserves reside in politically secure countries. Australia is rapidly moving into a leading position as a gas exporter and its proximity to the fastest growing markets for the commodity is an added bonus. An energy sector on the scale currently planned comes with environmental concerns. These will need to be met head on and dealt with efficiently to minimise danger to the Australian countryside and water resources. However it would be a mistake to allow such concerns to derail an evolution which is likely to be an important support for the Australian economy for the foreseeable future.

Due to the massive capital investment required to bring production online and the medium-term downward pressure on gas prices as a result of the surge in global supply, the performance of related shares tends to be mixed. The pace of M&A activity seems to have abated somewhat with clear winners and losers becoming evident. I last reviewed coal bed methane companies in Comment of the Day on October 7th 2011.

UK listed BG Group found support in the region of 1100p from August following a 500p decline over the preceding five months. It has since held a progression of higher reaction lows and pushed back up to test the highs. A sustained move below 1400p would be required to begin to question medium-term scope for a successful upward break.

Beach Petroleum hit an accelerated peak near A$1.80 three weeks ago and pulled back sharply to find near-term support in the region of A$1.40. Although it has at least partially unwound the overextension relative to the MA, some additional consolidation appears likely following such an abrupt sell off. A sustained move below the 200-day MA, currently near A$1.30 would suggest a medium-term change to the demand dominated environment.

Senex Energy continues to extend its accelerating uptrend. It bounced back impressively from last week's decline and a sustained move below 90¢ would be required to break the short-term uptrend and check momentum.

Santos has been largely rangebound for the last three years and it continues to rebound from a retest of the lower side in August. It has a held a progression of higher reaction lows for the last six months and a sustained move below A$13.50 would be required to question medium-term scope for additional upside.

Woodside Petroleum continues to range in the region of the 2008 lows and encountered resistance in the region of the 200-day MA over the last few weeks. It needs to sustain a move above A$38 to indicate a return to medium-term demand dominance.

Icon Energy rallied impressively over the last couple of months but posted a large downside weekly key reversal last week from region of the March 2011 high. It will need to sustain a move above 30¢ to suggest a return to medium-term demand dominance.

Origin Energy is pulling back from the most recent test of the overhead supply and a sustained move above A$14 at a minimum will be required check potential for additional downside. Dart Energy, Carbon Energy and Blue Energy remain in consistent medium-term downtrends and will need to break their respective progressions of lower rally highs to question downside potential. Comet Ridge also has a downward bias.