LNG

Australian LNG exports reached a new record of 81.4 million tonnes in 2022 and the export revenue increased by 86 percent year-on-year to A$92.8 billion (US$63.4Bln) in the 12 months to the end of December because of much higher prices and Australia appeared to tie in volume terms as World No. 1 exporter along with Qatar and the US.

Nov 16 (LNGJ) – The 10 Australian LNG plants exported 7.13 million tonnes of LNG in October, or around 104 cargoes, down slightly from the 7.21MT lifted in September but at record prices, according to estimates by Adelaide-based consultants EnergyQuest.

   The firm estimated that Australian LNG export revenues increased significantly in October to a new record of A$10.6 billion (US$7.2Bln), up from a previous record A$10.2Bln in September 2022 and up by 82 percent on October 2021. “Compared with September, Australian projects delivered three more cargoes to North Asia - China, South Korea and Japan in October. There were no cargoes delivered to Europe,” said EnergyQuest.

Australia’s nine liquefied natural gas export plants shipped an estimated 6.66 million tonnes of LNG during the month of August compared with 6.20MT delivered in the previous month as Asian demand remained high, while prices dropped significantly month-on-month in the Australian domestic gas market.

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.

The Australian view of the global natural gas and LNG markets has been updated since the Ukraine crisis and is seen as not only affecting Europe but has altered forecasts and aims in the whole Asia-Pacific region as well.

“Not only is Russia the biggest gas supplier to Europe, it is now the world’s fourth-largest LNG producer, with more than half Russian LNG going to Asia, where Japan is the biggest Russian customer,” said the recently updated report from Adelaide-based consultants EnergyQuest.

“At the same time that Japan’s LNG imports from Russia are under a cloud, Australian supplies to Japan are under threat from the looming cessation of gas from Bayu-Undan for Darwin LNG, the decline of the North West Shelf and the problems with Prelude,” said the report.

These are references to the Bayu-Undan gas field in the Timor Sea and which is near depletion as a supplier to the Darwin liquefaction plant, while problems continue with Shell’s Prelude floating production hull offshore northwest Australia.

“The end of Bayu-Undan also means the end of Timor-Leste’s major revenue-producing asset,” said EnergyQuest.

It noted that with the European crisis, the demand for Australian LNG is likely now to be even greater, which is an opportunity to win more contracts for current new projects.

Aims and priorities

“Woodside should be able to contract more of Scarborough and Santos more of Barossa,” said the report in reference to separate new LNG projects planned by Perth-based Woodside Petroleum and Adelaide-based Santos .

“The second priority would be to keep existing plants full, particularly the North West Shelf in the face of its looming decline,” it added.

A third priority raised by the report was that of brownfield expansions to existing Australian projects but they would need to be able to demonstrate links to net-zero aims.

“New Australian greenfield projects are unlikely. We already have 10 LNG projects and brownfield expansions would be the most cost effective,” explained the report.

The report noted that the Western Australia Browse project has already had three attempts at development and none succeeded so the emergence of a new Browse venture was seen as “pretty unlikely”.

PNG hopes

“Papua LNG in Papua New Guinea is probably the most likely new project in the neighbourhood. It would be great for Timor-Leste if Sunrise (a project once studied by Woodside) could be developed but it has challenges,” added EnergyQuest.

The consultancy also mentioned key Australian statistics from 2021 on production in the various states.

LNG production increased in Western Australia and Queensland while domestic natural gas output decreased in all regions and national oil production decreased “significantly” in 2021.

“However, national condensate production in 2021 increased by 5.8 percent year-on-year to a record level of 93.4 million barrels thanks to record production from Prelude, Ichthys and Wheatstone and high levels of output from the NWS and Gorgon,” stated the report.

Australian exports of liquefied natural gas hit a record high in 2021 to keep the nation in the World No. 1 spot of global exporters from its 10 liquefaction plants in the East and West coasts and in the Northern Territory.

Australian LNG shipments to North Asia from the world's largest exporter hit record levels for some nations in March and revenues increased from the previous month, led by Chinese demand for cargoes.

Australia is on track for record LNG shipments to remain the world’s largest exporting country, ahead of Qatar and the US, even in a year when two plants suffered long shutdowns and economies worldwide were slowed by the Covid-19 pandemic.

Australia’s charter member of the International Gas Union (IGU), the Australian Gas Industry Trust (AGIT), has appointed its first Executive Officer, Dr Jen Thompson, to further develop core objectives of promoting LNG and gas industry research and public education.

Australian nine-month liquefied natural gas export totals are higher than last year even amid plant outages and the Covid-19 pandemic, putting the nation on track to cement its position as world No. 1 exporter ahead of Qatar.