Australia LNG Export Volume Eases, Prices Firm

Australian LNG exports in August were lower month-on-month but revenue increased thanks to higher prices, energy advisory firm EnergyQuest said September 18 in its August 2018 LNG Report.

Australian LNG shipments in August were 6.1 million metric tons (90 cargoes), compared with 6.3mn mt (93 cargoes) in July, according to the report. Wheatstone shipped 3 fewer cargoes. However EnergyQuest estimates that overall LNG export revenues increased in August to A$3.9bn (US$2.8bn), up from A$3.8bn in July.

East coast LNG exports increased to 1.79mn mt in August, from 1.67mn mt in July, whereas west coast LNG shipments declined to 4.3mn mt in August, from 4.6mn mt in July.

Asian spot LNG prices rose to their highest in over two months in mid-August, buoyed by stable demand ahead of winter, and as some producers curbed supply due to maintenance or disruption at plants, EnergyQuest said.

Thanks to high spot prices, Australian east coast LNG netbacks at the end of August were significantly higher than east coast domestic short-term gas prices. Based on marginal costs and spot LNG prices of US$11.64/mn Btu, the netback at Wallumbilla was A$14.61/GJ at the end of this August. This will most likely put upward pressure on domestic prices, said EnergyQuest. 

Wallumbilla is the Australian gas hub set up in 2014 and based on delivery at the small settlement 435 km northwest of Queensland's capital Brisbane (see map below, courtesy of Australia's AEMO).