Australia will record a year for energy exports in 2018 — thanks largely to a China-driven surge in natural gas exports.

In the latest Energy and Resources Quarterly report released this week, chief economist Mark Cully predicted resources and energy export earnings would increase to $230 billion this year.

The next five years would deliver more than $1 trillion in resources and energy export income, although the ramp-up in export volumes would run its course by the end of the decade.

Growth in liquefied natural gas (LNG) is a key short-term earnings driver. It’s expected to increase 70 per cent from $23 billion in 2016-17 to $39 billion in 2022-23 — largely driven by Chinese demand.

LNG — natural gas that has been cooled to reduce its volume for easy storage and transport — will overtake coal to become the second biggest resource and energy export for 2018-2019.

Australia is expected to be the world’s biggest natural gas exporter by next year as huge projects near completion. Although there are concerns Australia will miss out on future LNG developments due to competition from the Middle East, Russia and ­Africa.

Globally, world LNG imports are projected to increase from 250 million tonnes in 2016 to 378 million tonnes in 2023.

“Gas is expected to record the strongest growth of the fossil fuels, assisted by low prices, growing supply and its role in reducing air pollution and carbon emissions,” the report reads.

“Gas use in power generation – the largest gas-consuming sector – is also expected to rise, but demand growth will be constrained due to competition from renewables and coal.”

Researcher Bloomberg New Energy Finance is forecasting a further surge in demand to 2030 driven by environmental measures in China, rising power generation in South and Southeast Asia, and a reduction in domestic gas production in Europe.

That’s good news for junior Aussie oil and gas explorers.

Here’s a table showing how key ASX junior oil and gas plays have performed recently:

WordPress Tables Plugin

Increasing interest in gas comes as the NT fracking inquiry recommended lifting the moratorium in that State.

Last month, the scientific inquiry told the NT government if all its 135 recommendations were implemented, “the challenges and risks associated with any onshore shale gas industry in the NT can be appropriately managed”.

The moratorium on hydraulic fracking in the NT has been in place since September 14, 2016.

Elsewhere across the country, fracking is prohibited in Victoria and is the subject of a moratorium in Tasmania and Western Australia.

The Gina Rinehart-backed Lakes Oil is waiting on the outcome of a Supreme Court challenge to overturn Victoria’s ban on gas exploration.

A renewed focus has seen 65 per cent of the Aussie stocks trading up in the past 3 months.