| What to watch in 2024 Offshore regulation The trials and travails of Santos’ Barossa project are well known, with legal challenges from Traditional Owners causing over a year of delays to the drilling program and also impacting pipeline laying. Woodside’s Scarborough LNG project saw approval for a seismic program rescinded due to similar issues; however, so far, the project schedule hasn’t been affected. The Australian Government, in response, stated that they would be considering the issue and has now quietly released a consultation paper on the topic. The outcome on this issue will be of major importance to the future of Australian LNG. Domestic gas policy The east coast gas market is in better shape than recent years, and the ACCC’s latest advice is that there will be sufficient gas to meet east coast domestic demand in 2024. EnergyQuest’s analysis is broadly consistent with that view, but more significant will be the years to come with significant shortfalls beginning 2028. Over in the west, there is a likelihood of significant change coming this year. The WA domestic gas market has been under supply pressure, and EnergyQuest analysis shows that this will persist until at least 2026. Beyond 2026, if the Scarborough project is delayed by legal action or the Perth Basin underperforms, the market will remain tight. Taxation Another policy worthy of attention are the proposed changes to the Petroleum Resource Rent Tax (PRRT). While the oil and gas industry says it is satisfied with the proposed changes, the Federal Opposition has yet to indicate support, and the enabling legislation didn’t pass Parliament in 2023, so it will now be brought forward in 2024. Without support from the Opposition, the Government will need to deal with the Greens if it wants to change the PRRT. Should that come to pass, there is likely to be additional challenges for oil and gas producers. Statistical summary Australia almost achieved a new record for LNG export volumes in 2023. Based on EnergyQuest data, Australia’s LNG exports for 2023 totalled 81.1 Mt, and revenue earned for the calendar year was A$74.2 billion. This compares to LNG exports of 81.4 Mt for 2022 and revenue of A$90.4 billion, and 81.1 Mt of LNG exported for 2021 with a revenue stream of A$49.8 billion. In December, Australian LNG projects shipped 7.25 Mt (105 cargoes), more than the 6.69 Mt (98 cargoes) shipped in November. The projects shipped an average of 3.4 cargoes per day, slightly more than the 3.3 per day average in November. EnergyQuest estimates that Australian LNG export revenue in December was $6.24 billion, which is higher than the $5.63 billion in November but represents a 27% decrease compared to December 2022. In December, Queensland imported gas from the other states, as it did in November, with the volumes in December totalling 3.47 PJ compared to 4.03 PJ in November. East coast electricity demand increased by 9% in December compared to the same period a year earlier. Gas-fired power generation (GPG) was higher, increasing by 203 GWh or 42% from a year earlier. |
Information about the EnergyQuest Australian LNG Monthly is available by clicking here.