Aussie LNG export earnings to drop in 2023-24

Australia’s LNG earnings are expected to fall by A$20bn ($13.7bn) year/year to A$73bn in the year to June 2024 (2023-24), as prices settle well below 2022 levels, the department of industry, science, and resources said in its December quarterly report published on December 18.

Export revenue is set to decline by A$8bn in 2024–25, reaching A$64bn. Key risks to the forecast include a potential regional escalation of the Hamas-Israel conflict, along with seasonal demand fluctuations that could impact earnings from spot sales, as stated by the department.

Australian LNG export earnings forecasts have been adjusted upward by just over A$1bn for both 2023–24 and 2024–25. This adjustment reflects recent geopolitical events, adding to risk and slightly elevating prices compared to expectations from the September quarterly report, the department said.

Australia is projected to export 80mn tonnes of LNG in 2023–24, slightly lower than the 81.5mn tonnes in 2022-23. Volumes are expected to decrease to 78mn tonnes in 2024–25, primarily due to reduced output from the North West Shelf.

In response to potential domestic shortages after 2023, the West Australian government has announced a ban on exports, applying to most onshore gas generated in the state. Western Australia already reserves 15% of its production for domestic usage, with stringent enforcement expected over the outlook period. The department said that price caps on domestic gas contracts in the eastern Australian market are not expected to directly impact exports.