This article was originally published by Rosalie Starling, Editor – Hydrocarbon Engineering, 14th Nov 2016
The value of Australia’s monthly LNG exports climbed to a record AUS$1.75 billion last month – the best performance in 22 months. The milestone included a third Queensland consignment to Mexico, a market normally serviced by neighbouring American-supplied gas. The strong October performance surpassed the previous monthly record of AUS$1.72 billion in Australian LNG export values, set in January last year.
The updated export estimates are contained in the just released October Monthly LNG Report by independent energy analyst, EnergyQuest. The Monthly LNG Report monitors 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.
EnergyQuest CEO, Graeme Bethune, said the latest robust LNG outcomes were underpinned by many Australian LNG projects now performing above nameplate capacity. Australian LNG export volumes grew by 6.6% (65 cargoes) in October to 4.3 million t up from 4.0 million t (61 cargoes) in September. Combined with higher oil prices, Bethune said EnergyQuest estimated that the value of LNG exports in October was at least AUS$1.75 billion, a record.
“There was a particularly strong performance by LNG projects on the west coast,” Bethune said. “Western Australian projects in October shipped 2.4 Mt (36 cargoes), up from 2.2 million t (33 cargoes) in September. Woodside’s Pluto project shipped seven cargoes in October, up from five cargoes in September. Gorgon, operated by Chevron, continues to ramp up and shipped one additional cargo. Darwin LNG, operated by ConocoPhillips, shipped 0.3 million t (5 cargoes), up from 0.2 million t (3 cargoes) the previous month.”
On Queensland’s east coast, the Gladstone LNG projects shipped 1.5 million t (24 cargoes), down slightly from 1.6 million t (25 cargoes) in September.
Bethune said the increased October cargoes went to long term buyers in China, Japan and Korea.
“Interestingly, the Santos-operated Gladstone LNG project (GLNG) sent its first cargo to Mexico, a country that imports gas from the United States,” Bethune said. “The shipment was delivered to the Manzanillo LNG facility, on Mexico’s mid-west coast, a project which is a joint venture between Mitsui, KOGAS (a GLNG partner), and Samsung. This consignment means that all three new Queensland LNG projects – QCLNG, GLNG and APLNG – have now shipped one cargo each to Mexico.”
“Asian buyers like KOGAS are increasingly looking to new gas markets and as Mexico imports gas from the US, it is interesting to see Queensland gas being imported into Mexico. From a broader market perspective, rather than new US LNG supply heading west to Asia, which is a major market concern for Australian and South East Asian LNG players, this cargo was yet further demonstration of the Australian LNG sector being able to ship east to America,” Bethune said.
“To date, there has only been one cargo going the other way, a Shell cargo from Sabine Pass on the US Gulf Coast delivered to China in August via the Panama Canal.”
The latest EnergyQuest report also noted that despite what is supposed to be an oversupplied market, the LNG spot price in Asia is now the highest it has been all year –rallying to more than US$7/million Btu.