LNG

Australian LNG exporters be required to reserve 20% of their gas production for the east coast domestic market under a new policy, effective July 1, 2027. The measure targets three LNG projects – Shell/Arrow Energy's Queensland Curtis LNG, Santos’ Gladstone LNG, and Origin/ConocoPhillips' Australia Pacific LNG.

The Australian Government plans to extend a natural gas price cap through mid-2025 while seeking to relax its attitude towards LNG exporters who have already agreed to domestic gas supply commitments.

Sept 21 (LNGJ) - Origin Energy, the Australian utility, has agreed to sell its 100 percent interest in its Beetaloo Basin shale gas assets in the Northern Territory. Origin said it was exiting its upstream exploration permits but would share any future profits and would retain its valuable Australia Pacific LNG stake in Queensland where it is upstream feed-gas provider and ConocoPhillips is the plant operator.

   The Sydney-based utility said agreements had been reached to sell the Beetaloo assets to Australia’s Tamboran Resources and its partners for A$60 million (US$40.2M) and with a royalty on future production over the life of the field. “Origin has also executed a gas sale agreement for offtake of future gas production,” it added.

Australia is undergoing an East Coast electricity generating problem that has caused panic in the new left-wing Labor government rather than a full-blown domestic natural gas supply crisis.

Australian wholesale natural gas prices more than doubled year-on-year and the three LNG plants in the state of Queensland shipped record volumes in the July-to-September period because of higher spot LNG prices and firm demand ahead of the North Asia winter.

The Australian Energy Market Operator (AEMO) said that total East Coast Australia gas demand increased by 5 percent in the third quarter compared with the same period of 2020.

In its third-quarter “Quarterly Energy Dynamics” report, AEMO gave an overview of prices and said that year-to-date demand for LNG from the three state of Queensland export plants, which have a combined nameplate capacity of 25.3 million tonnes per annum, came to over 20.5MT of LNG during the first nine months of 2021.

AEMO noted that the quarterly average prices were at record levels across all East Coast gas markets, averaging $10.74 per gigajoule (GJ) compared with $4.47 per GJ in the third quarter of 2020.

“It is the first time every market has averaged over $10 per GJ,” said the report.

The various Australian wholesale natural gas markets saw prices rising in Adelaide by 113 percent, Brisbane by 155 percent and Sydney logging an increase of 156 percent.

“Queensland LNG exports continue to be influenced by strong Asian LNG demand and record high international gas prices,” said the AEMO report.

“Demand for Queensland LNG is usually lower in the Northern Hemisphere summer but Q3 2021 demand was the highest Q3 on record, and the fourth highest quarter on record,” it added.

“Year-to-date demand has totalled 1,038 PJ, the first time demand has exceeded 1,000 PJ in the first three quarters of the calendar year and is tracking 62 PJ higher than the previous record in 2019,” stated AEMO.

By participant, the Santos-operated Gladstone Liquified Natural Gas (GLNG) recorded the largest increase of 27.7 PJ, while Shell’s Queensland Curtis LNG (QCLNG) increased by 2.4 PJ, and Australia-Pacific LNG (APLNG), operated by ConocoPhillips, increased by 2.1 PJ.

The report added that there were 87 LNG cargoes exported from Queensland  in the July-September quarter, up from 78 in the same period in 2020.

The number of GLNG cargoes exported increased from 21 to 29 over the same period, QCLNG cargoes numbers rose from 28 to 29, while APLNG cargoes numbers were unchanged at 29.

TotalEnergies has completed a transaction in Australia with the US equity fund Global Infrastructure Partners in relation to the downstream facilities of the Gladstone LNG project in Queensland for a sum of more than US$750 million.

The downstream assets are owned by TotalEnergies subsidiary Total GLNG Australia (TGA).

“As part of this transaction, GIP will receive a throughput-based tolling fee calculated on TGA’s share of gas processed through the downstream facilities over a period of 15 years,” explained TotalEnergies.

TGA retains full control and ownership of its 27.5 percent interest in the Gladstone LNG downstream joint venture.

“We have worked closely with GIP to achieve this infrastructure transaction and are happy of this first collaboration with such an experienced infrastructure partner,” said Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies.

Monetization

“This monetization of infrastructure assets contributes to focusing further TotalEnergies’ capital on core producing assets,” he added.

The Gladstone LNG plant, operated by Adelaide-based Santos, is one of three coal-seam-gas to-LNG ventures on Curtis Island near the port of Gladstone.

The other GLNG project partners are Malaysian oil and gas company Petronas and Korea Gas Corp

The integrated LNG project consists of CSG gas wells producing feed gas from the Fairview, Arcadia, Roma and Scotia fields, located in the onshore Bowen-Surat Basin in Queensland.

The GLNG plant and the neighbouring Shell-operated Queensland Curtis facility and the ConocoPhillips-run Australia-Pacific plant ship cargoes to Asia, mainly China, South Korea and Japan.

The GLNG project includes pipeline transportation of the CSG over a distance of around 400 kilometres to the liquefaction plant.

The plant, which has been on stream since 2015, consists of two Trains with a total nameplate capacity in excess of 7.8 million tonnes per annum. 

Australia LNG operator Santos said it signed an accord to sell a 12.5 percent interest in the Barossa natural gas project planned as a feed-gas source for Darwin LNG to the largest Japanese LNG importer, JERA Co. Inc.

Origin Energy, the Australian utility and upstream supplier for the Australia-Pacific LNG export plant in Queensland, whose other shareholders are ConocoPhillips and Chinese major Sinopec, said its share of quarterly LNG sales rose by 8 percent to 828,700 tonnes from the total of 31 cargoes shipped from the facility.

ConocoPhillips, whose predecessor company started US liquefied natural gas exports from the state of Alaska 50 years ago, has agreed to sell its operated Darwin LNG export plant in Australia and other gas assets to Australian energy company Santos.

Australia Pacific LNG’s acquisition of the Ironbark coal-seam gas project in Queensland from Origin Energy has been approved by the country’s regulators who do not see the deal affecting East Coast domestic natural gas supply.