EnergyQuest has just released its Australian LNG Monthly for April 2020. Some of the highlights are as follows:
- Notwithstanding the global surplus of LNG and slowdown in economic activity due to COVID-19, Australian LNG shipments are holding up well. In April Australian projects shipped 6.9 million tonnes (Mt) (101 cargoes).
- Deliveries to China are also holding up. Australian projects delivered 40 cargoes to China in April, after delivering 29 in March and 36 in April 2019.
- Unlike the situation in the US, it seems unlikely that there will be trains shut-in or major output cuts from Australian projects due to lower oil and LNG prices.
- However, there are likely to be fewer spot cargoes at current prices.
- More generally low prices have slowed sanction of Woodside’s Scarborough LNG project and Santos’s Barossa backfill for Darwin LNG.
- Notwithstanding the uncertainties, LNG is making a positive contribution to the Australian balance of payments. According to the latest ABS estimates, LNG export revenue was up by 8.0% in March compared with a year earlier.
- The Gladstone LNG producers had a production deficit in April, with total production from LNG producers 2.2 PJ less than total LNG exports.
- Production from Moomba and offshore Victoria was up by 1.9 PJ compared with March and steady compared to a year ago. Overall COVID-19 restrictions do not appear to have affected domestic gas demand.
- Similarly, electricity demand appears relatively unaffected. East coast electricity generation was only down by 2% in April compared with a year earlier.
- East coast short-term gas prices weregenerally lower than those in March and significantly lower than April 2019. Short-term domestic gas prices are the lowest they have been since 2016.
- EnergyQuest estimates that the delivered cost of Australian gas to Japanese manufacturers in March was US$11.61-12.61/MMBtu or A$17.58-19.10/GJ, significantly higher than east coast gas contract prices.
Information about the EnergyQuest Australian LNG Monthly is available by clicking here