Australian LNG Monthly Report – November 2023
 Big and bigger
The big news of the month was the confirmation by Woodside and Santos that both were in discussion on a potential merger.

The company resulting from a merger (we call MergeCo) would certainly be a significant company and become the world’s fourth largest listed LNG producer after Shell, Exxon, and Chevron.  

MergeCo would be even more significant in the Australian domestic context and a look at EnergyQuest’s database shows some of the key metrics for MergeCo: 

-Oil and natural gas liquids: MergeCo would account for half of Australia’s oil production. 
Gas production: MergeCo would account for 18.6% of Australia’s natural gas production and be the equal largest producer with Chevron. 
-LNG: Woodside is the larger LNG producer with 10,950 tonnes in the 12 months to September 2023 against Santos’ 1,970 tonnes. MergeCo would account for 14.4% of Australia’s LNG exports. 
-West coast domestic gas supply: MergeCo would account for 46.3% of Western Australia’s domestic supply. In the medium term EnergyQuest estimates that Scarborough will account for 15% of domestic supply once it starts producing from 2026, increasing the total market share of MergeCo to above 50%. As the single biggest new domestic gas supply, Scarborough will have a key influence on WA’s supply-demand balance and ultimately gas prices. 
-East coast gas production: Santos is the larger producer in the east overall with 131.1 PJ produced in the 12 months to September 2023 against Woodside’s 97.6 PJ. MergeCo would account for 9.4% of east coast gas production. 

LNG statistical summary
In November, Australian LNG projects shipped 6.69 Mt (98 cargoes), virtually the same as the 6.76 Mt (98 cargoes) shipped in October. 

Prelude had no shipments in November (or in September and October), having started a major maintenance turnaround in August. 

EnergyQuest estimates that Australian LNG export revenue in November was $5.64 billion, which is lower than the $5.71 billion in October, and a 32% decrease compared to November 2022. Western Australia projects earned export revenue of $3.21 billion, Queensland projects brought in $1.65 billion, and Northern Territory projects $0.77 billion.

Overall, Australia’s November 2023 shipments were 81.4 Mtpa on an annualised basis.

China and Japan remained dominant destinations. In November, 102 cargoes were delivered. Over a third of Australia’s LNG at 36 cargoes were delivered to China, up from 25 in October and 32 in November 2022. Australia delivered 29 cargoes to Japan in November, down from 36 in October, and down from 36 in November 2022.

East coast domestic statistical summary
In November, Queensland imported gas from the other states, which it did in October; with the imported volumes in November being similar to that in October totalling 4.03 PJ compared to 3.93 PJ in October. 

Queensland (at Wallumbilla Gas Supply Hub) short-term domestic gas prices in November were higher, averaging $11.40/GJ, compared to $8.49/GJ in October.

Southern short-term domestic gas prices in November increased, with Sydney averaging $11.81/GJ (compared to $9.33/GJ in October), Victoria averaging $11.44/GJ (compared to $8.85/GJ in October) and Adelaide averaging $12.60/GJ (compared to $9.92/GJ in October).

For NEM power generation, coal generation share increased to 54%, up from 53% a year earlier, with lower generation in NSW, but higher generation in Queensland and Victoria. Gas’s overall share of the NEM power generation market remained steady at 4.3% share in November.

Information about the EnergyQuest Australian LNG Monthly is available by clicking here.