13-07-2016

Australian LNG exports surge more than 18% to 3.6m tonnes

LNG

Combined exports from Australia’s three LNG hubs surged 18.5% in June as the country’s LNG plants continued to add to global energy supplies.

Total June output climbed to 3.6 million tonnes (Mt) – a surge of 560,000t over the May total with strong contributions from North West Shelf and Pluto plants in Western Australia and the QCLNG project here in Gladstone.

And despite low oil and LNG prices, Australia’s six LNG projects all maintained high levels of production in June, in many cases above nameplate capacity.

The update is contained in the just released June Monthly LNG Report by independent energy analyst, EnergyQuest. The report is a new EnergyQuest service, allowing users to monitor the growth in Australian LNG by project, together with developments in major markets, progress by competitors and interactions between Australian LNG projects and domestic gas markets.

The ramping up Queensland plants consumed 87 petajoules (PJ) of conventional and coal seam gas during June, contributing to a short-term domestic gas price hike on the east coast as it shivered under unduly cold winter conditions.

“The strong growth in Australia’s June LNG exports reflects a full month of resumed production from the Woodside-operated NWS, which underwent planned maintenance in May, together with particularly strong performance from Woodside’s Pluto project (WA) and Shell’s QCLNG project in Gladstone,” EnergyQuest CEO, Dr Graeme Bethune, said today.

“We expect further growth in Australian LNG exports over the next six months as the second trains of the GLNG and APLNG projects come into production and the Chevron-operated Gorgon project in WA begins to ramp-up.”

Go Queensland

Total LNG export volumes out of Queensland, of 1.4 Mt (22 cargoes) in June, are now starting to shadow those of Western Australia, which exported 1.8 Mt (27 cargoes) in June.

“The growth in Queensland exports is quite remarkable given that its first LNG project only commenced exporting 18 months ago,” Dr Bethune said.

The Northern Territory exported 0.3 Mt of LNG (5 cargoes) from the Darwin LNG project in June.

Northern Territory exports will start growing from late next year when the INPEX Ichthys in Darwin also starts production.

Australian cargo to Egypt

EnergyQuest estimates that forty-four cargoes were delivered from Australian projects in June, mostly to traditional north Asian customers ( 22 to Japan, 15 to China, 2 to Korea and 1 to Taiwan) but there were also 2 cargoes each to India (where LNG demand is growing) and to Egypt.

Indian and Chinese LNG markets growing but continuing weakness in Japan and Korea

The latest market data available (for May) shows total Indian LNG imports (from all countries) up by 0.45 Mt in May, and 40% higher than May 2015, reflecting the strong growth in India’s LNG sector seen all year (+2.2 Mt, +41% in the first five months of 2016).

Chinese LNG imports grew by 27% in May compared with a year earlier. Total Japanese and Korean LNG imports continue to fall, down 4.0% and 5.8% respectively in May 2016 compared with May 2015.

US LNG exports so far focussed on the Atlantic rather than Pacific Basin

The new Sabine Pass LNG project on the US Gulf Coast shipped 5 commissioning cargoes in June. Most Sabine Pass cargoes are going south to countries in South America, with no cargoes yet to North Asia and only one cargo to Europe (Portugal).

A second European-bound cargo is currently heading to Spain. Sabine Pass continues to ramp up at about the same rate as APLNG. The first commercial delivery under the Shell/BG contract commences in November.

Australian domestic gas markets

Short-term east coast gas prices spiked in June, reflecting cold weather in the south and the ramp-up of LNG projects in Queensland. LNG prices were below short-term domestic gas prices.

However, the three Queensland LNG projects continued to operate at high levels, consuming 87 petajoules (PJ) of conventional and coal seam gas during the month.

The Gorgon domestic gas plant in WA is not yet producing.

Source: The Observer

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