LNG

Woodside Energy, operator of the North West Shelf and Pluto LNG export plants in Western Australia, said the shareholders in the projects have agreed to process feed gas from the Equus gas field in the Carnarvon Basin.

The Australian government said the nation’s LNG export earnings are forecast to rise to A$90 billion (US$58.2Bln) in the current fiscal year from A$70Bln in the previous year as the fallout from Russia’s invasion of Ukraine continues to place upward pressure on LNG spot prices.

Beach Energy, the Australian exploration and production company set to become the nation’s newest LNG exporter in 2023, has completed its Otway Basin drilling campaign offshore South Australia and Victoria to boost domestic supplies.

Shell Australia said liquefied natural gas cargo exports from the “Prelude” floating LNG production facility offshore northwest Australia will be halted at least until mid-July because of an industrial dispute with unions.

The Shell-operated FLNG vessel is moored 400 kilometres (249 miles) north of the town of Broome on Western Australia’s Kimberley coast and has 3.6 million tonnes per annum of capacity.

The dispute is with trade unions represented by the Offshore Alliance comprising the Australian Workers’ Union and the Maritime Union of Australia and centres around stalled negotiations on a new collective agreement.

The Australian energy safety authorities had only allowed the “Prelude” FLNG plant to re-start in April 2022 after being shut in December 2021 after the latest in a series of incidents in an electrical utility on board.

The “Prelude”, which came on stream in 2019, generally has around 200 or so crew on board at the one time.

A Shell Australia spokesperson said the company had notified LNG customers that it was cancelling cargoes until at least the middle of July due to the impact of the industrial action.

The unions for workers on board the “Prelude” said they had failed to make progress on several outstanding issues in negotiations with Shell.

Shell added that it had cancelled the change-over of workers due to fly to the vessel as a result of bans introduced by union members.

Restrictions

Workers have said there would be restrictions including signing permits at certain times between July 1 and July 7, a ban on restarting processor compressors and steam turbine generators that have tripped and a ban on refuelling helicopters or unloading certain cargoes.

The unions added that the work stoppages would also affect the mooring of LNG carrier alongside the “Prelude” to lift cargoes at certain hours of the day.

The “Prelude” joint venture is owned 67.5 percent by Shell and 17.5 percent by Inpex Corp. of Japan, operator of the Australian Ichthys project near Darwin in the Northern Territory.

A further 10 percent of Prelude is held by LNG buyer Korea Gas Corp. and 5 percent by CPC Corp. of Taiwan.

Shell and its partners recently took a final investment decision to proceed with the Crux natural gas field joint venture offshore Western Australia to provide more feed gas for the “Prelude”.

The project has its key regulatory approvals and these include a production licence from the National Offshore Petroleum Titles Administrator.

The National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) has also accepted the Crux offshore project proposal.

Resources from the Crux gas field will mean “Prelude” FLNG receiving up to 550 million standard cubic feet of gas per day.

Shell Australia Chairman Tony Nunan had said at the time that developing the Crux project reinforces the company’s commitment to Australia, including boosting the regional economy, creating jobs and providing training opportunities.

Santos, the Asia-Pacific LNG plant operator and Western Australia’s biggest domestic natural gas supplier, has renewed a gas supply agreements with Yara Pilbara Fertilisers to supply the Yara liquid ammonia plant on the Burrup Peninsula in Western Australia.

Leading Australian gas and power supplier AGL Energy has confirmed it will cease any further development of the proposed Crib Point LNG import project in the southern state of Victoria as it also pursues a corporate overhaul by spinning off infrastructure assets.

Woodside Petroleum, the operator of the Northwest Shelf LNG export plant and Pluto LNG in Western Australia, has named Meg O’Neill as Acting Chief Executive on the agreed retirement of incumbent Peter Coleman from the Board on April 19 and the company on June 3.

A Trans-Australia natural gas pipeline is back on the agenda with supplies being transported from Western Australia to the East Coast instead of, or in addition to, developing LNG import infrastructure and has renewed talk about the undeveloped onshore Australian resources rivalling the US Permian Basin.

Woodside Petroleum said its Singapore-based trading unit signed a a sale and purchase agreement (SPA) with Germany utility and energy company RWE Supply & Trading GmbH for the supply of LNG from Woodside’s global portfolio for a term of seven years starting in 2025.

Australian liquefied natural gas export plants shipped 6.9 million tonnes of cargoes in November, higher than the previous month but slightly down on the 7.1MT dispatched in November 2019, though still keeping the nation as the World No. 1 LNG exporter.

According to the consultants EnergyQuest, a total of 101 cargoes left Australian liquefaction plants on the West and East Coasts, up on October’s 98 cargoes.

“Deliveries to major North Asian markets were higher in November compared with November 2019,” said the report.

“Australian projects delivered a total of 91 cargoes to China, Japan and Korea in November, up from 83 cargoes a year earlier,” it added.

Australian projects delivered 38 cargoes to China in November, after delivering 31 in October and 38 in November 2019.

Thirty-nine deliveries were made to Japan in November, more than the 37 delivered in October and up on 38 delivered in November 2019.

Australia delivered 14 cargoes to South Korea in November, double the deliveries in the same month a year ago when seven cargoes were delivered.

“Average LNG plant capacity utilisation was 95.7 percent in November up from 90.0 percent in October,” said EnergyQuest.

“Australia will export around 78MT for 2020, slightly higher than the 77.5MT exported in 2019, and more than Qatar nameplate capacity,” the report added.

East Coast coal-seam-gas-to-LNG projects, Queensland Curtis LNG, Australia-Pacific LNG and Gladstone LNG, again shipped a record amount, reaching 2.126MT (32 cargoes) in November, eclipsing the record set in October of 2.050MT.

“The East Coast projects operated at 102 percent of nameplate capacity during November. This is the first time in the history of the East Coast production they have exceeded nameplate capacity,” stated the report.

LNG spot cargo prices in Asia were continuing to increase with cargoes for January delivery reported at US$5.80 to US$9.20 per million British thermal units (A$12.00 per gigajoule).

“There were six November spot cargoes reported from the East Coast, three from APLNG and three from GLNG, and 10 spot cargoes from the West Coast (16 percent of total shipments),” said EnergyQuest.

“This was significantly higher than Queensland short-term domestic gas prices in November which averaged A$5.88 per gigajoule at the Wallumbilla Hub and A$6.26 per gigajoule in the Brisbane market,” said the report.