Australia hits all-time LNG export high

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Australia has broken through the 50 million tonnes (Mt), LNG export barrier for the first time with cargoes of liquefied gas from Down Under forecast to grow 22.6% in the 2017-18 financial year.

This record breaking performance for the 12 months to June 30 was revealed in the monthly LNG report for June released by energy consultancy EnergyQuest, which reported that Australia had exported 51.4Mt of LNG in the 2016-17 financial year.

This represents a 37% increase in LNG exports from 2016 output levels of 37.5Mt. EnergyQuest forecasts that current volumes from Australia will be bettered in the new financial year, spiking to 63Mt by June 30 next year – marginally below forecasts of 63.8Mt by the Office of Chief Economist.

LNG export sales volumes for FY17 has been estimated at $22.3 billion, a 29% increase from $16.6 billion returns during the previous corresponding year.

EnergyQuest said that Australia continues to hold its own in key North Asian markets against Qatar, the world’s largest LNG exporter, and rapidly rising exports from the United States.

“Over FY17, production increased from almost every Australian LNG project and both Western Australia and Queensland boosted their State outputs to higher levels,” Dr Graeme Bethune, EnergyQuest CEO, said.

“The exceptions were Darwin LNG (down 0.9Mt) and QCLNG (down 0.7Mt) compared to their previous 12 months performance.

“With rising Australian LNG export volumes, we are seeing the sector’s total export revenue increasing quickly, including record monthly levels towards year’s close.”

In June, the Pluto, Darwin and APLNG plants all produced at above nameplate capacity. APLNG produced at 110% of nameplate.

EnergyQuest noted the national LNG export output would rise further over the coming months with Gorgon shipments accelerating, WA’s Wheatstone plant due to start LNG production next month and first exports in September and Darwin’s Ichthys project scheduled to commence production in 2018.

On the international sales front, Japan, China and Korea continue to be the dominant destinations for Australian exports, comprising 91% of deliveries in June. Australia remains the largest LNG supplier to Japan and China and the second-largest to Korea, after Qatar.

During May Australia supplied 44% of Chinese LNG imports, 31% of Japanese imports and 21% of Korean imports.

The International Gas Union said global LNG exports reached a record 258Mt peak in 2016, representing a 13Mt increase from 2015. Eighteen countries exported LNG in 2016 led by Qatar, producing 77.2Mt, or 30%, of the world’s LNG, followed by Australia, Malaysia (25.9Mt) and Nigeria (18.6Mt).

The IGU said the prime driver behind global production peaking was Australia’s Gorgon Trains 1 and 2 coming onstream, ramped up production at Australia Pacific LNG and additional trains coming online at Gladstone LNG and Queensland Curtis LNG on the east coast. In the US maiden LNG cargoes flowing from Sabine Pass 1 and 2 added to the global glut.

The IGU predicts that Australia will surpass Qatar in 2018 as the world’s No.1 LNG producer, but the Australian Federal government’s more conservative timeline sees full capacity of 77Mt by 2011 from Australia with Qatar output dropping to 75Mtpa.

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