Australian 2016 LNG Exports Up 47%

Australia’s LNG exports surged by 47% to 45mn metric tons over calendar 2016 as new projects in Western Australia, the Northern Territory and coastal Queensland triggered a flood of new shipments to global markets, EnergyQuest, an Australian energy advisory firm said January 17 in a report.

Queensland has seen the biggest ramp-up in LNG export capacity recently. In October 2016, Bechtel concluded its six-year Curtis Island LNG program, with Australia Pacific LNG (APLNG) starting sustained production from the second train. It delivered all six LNG production trains to three customers – QGC, Santos GLNG, and APLNG – on Curtis Island, off the shore of Queensland, just north of the city of Gladstone. On October 10, Origin announced that APLNG has produced the maiden LNG cargo from the second of its two 4.5mn mt/yr production trains. The three facilities have the combined capacity to supply 25mn mt/yr of LNG – equal to about 8% of the world’s production.  

For the year 2017, EnergyQuest expects the export performance to be even stronger. This year exports are expected to touch 60mn mt as APLNG and Gorgon continue to ramp up and new LNG projects come into production: Wheatstone and Ichthys.

Most Australian LNG exports continued to go to established customers with long-term contracts during the year. Japan remains the largest customer for Australian LNG. China is now the second biggest customer. Korea is an emerging buyer and 2016 saw regular Australian cargoes to India, the report added.

Notwithstanding the lower oil price environment for much of last year, EnergyQuest estimates the total value of Australian LNG exports as A$17.9bn (US$13.5bn) in 2016. This is an 8.6% dollar increase over the previous year. Oil prices are now around 25% higher than the 2016 average, reflecting last November's decision by Opec. If current oil prices are maintained, EnergyQuest estimates that the value of Australian LNG exports will double to around A$36bn in 2017.

Shardul Sharma