A coalition of the willing?
In this report we detect a cautious optimism creeping back into the industry. Western Australia, the Northern Territory, South Australia and Queensland have been consistent and long-term supporters of the industry, which we have identified as a ‘coalition of the willing’. These states, through consistent policy settings and support, do not have anything like the gas shortage issues facing Victoria and NSW.
Even these two recalcitrant states have started to show signs of an openness to gas. Victoria has delivered a long-awaited approval for the Viva Energy LNG regasification project at Geelong. Santos secured a win for its long-delayed Narrabri project, with the National Native Title Tribunal allowing the NSW Government to grant the required petroleum production leases.
Offsetting this tempered optimism is the stark reality that national petroleum production dropped faster in Q1 2025, quarter on quarter (qoq), than any time since 2011 – hitting a five-year low. East coast domestic gas demand was at the lowest quarter level EnergyQuest has on record.
National LNG export revenue decreased to $16.1 billion in Q1 2025, down 11% from $18.1 billion in Q1 2024. This was due to both lower average prices and shipments.
The value of national LPG production in Q1 2025 was $654 million, down 20.7% (of which 13.4% was volume related) compared to $824 million in Q1 2024.
EnergyQuest estimates the value of national condensate production to be $2.09 billion, down 29.7% (17.3% was volume related) compared to $2.97 billion in Q1 2024.
We also note that Australia was the world’s second largest LNG exporter in 2024 and, despite some loose ‘facts’ floating around, Australia still has some of the lowest gas prices in the developed world. North America is consistently lower than Australia, thanks to shale gas, but few other developed countries are lower than Australia’s.
Key statistics
- In Q1 2025, Australia’s petroleum production dropped 18.9 MMboe (-7.0%) qoq.
- China’s demand for LNG dropped 21.6% in Q1 2025. Australia’s exports to China dropped a similar amount, but most of this fall was born by Western Australia which saw its LNG exports drop 11.8%, while Queensland LNG managed to grow marginally at 1.8%. Perhaps the high Chinese equity stakes in two of Queensland’s LNG projects had some benefit.
- Australia’s total LNG shipments in Q1 2025 declined to 19.5 Mt in Q1 2025, down 7.3% from 21.0 Mt qoq in Q1 2024. The North West Shelf led the national decrease, shipping just 2.6 Mt for the quarter, down 3.3 Mt (-21%) from Q1 2024 (qoq).
- Total domestic gas demand for Q1 2024 was 200.6 PJ, made up of 103.2 PJ, up 1.8 PJ (+1.7%) qoq for WA, 6.7 PJ down 0.3 PJ (-10%) qoq for the NT and 90.7 PJ down 7.4 PJ (-3.9%) qoq for the east coast.
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