Last week the Australian Bureau of Statistics (ABS) released the merchandise trade statistics for December, giving a final total for the 2020 year. The total value of 2020 LNG exports was A$36.2 billion, down 25.5% from the 2019 record of A$48.6 billion.
We have been asked what impact lower prices would have had on taxes to federal and state governments. West coast projects pay federal PRRT. The only projects currently paying PRRT would be the NWS, Pluto and Darwin. The 3 new projects, Gorgon, Wheatstone and Ichthys, which cost at least US$118 billion, would probably all still be in the cost recovery phase for PRRT purposes. When costs are covered though they will pay PRRT of 40% of profit. However lower prices mean it will take longer to recover the US$118 billion.
The three Queensland projects pay state royalties rather than PRRT. Total Queensland petroleum royalties in 2019-20 were $466 million. The Queensland Treasury expects a 34% decline in 2020-21 but the government has increased royalty rates, which with improving prices is expected to increase royalties to $635 million in 2022-23 and $702 million in 2023-24.
More than offsetting the fall in 2020 LNG export revenue, the value of petroleum imports fell from A$38.3 billion in 2019 to A$22.7 billion in 2020, reflecting lower prices and also lower demand due to travel restrictions, particularly in aviation.
Monthly revenue from LNG exports reached a 2020 low of A$1.8 billion in September, reflecting the lagged effect of lower oil prices. However revenue has increased in every month since, reaching A$2.7 billion in December, up by 4.7% from A$2.5 billion in November.
EnergyQuest’s Australian LNG Monthly tracks Australian LNG exports in detail. Further information is available by clicking here