EnergyQuest Australian LNG Monthly July 2021

EnergyQuest has just released its Australian LNG Monthly for July 2021. Some of the highlights are:

  • Australia supplied a record 72.4 Mt of LNG to North Asia – China, Japan, Korea and Taiwan- in FY 2021, up from 71.4 MT the previous financial year. The total landed value of this LNG is estimated to be A$38.9 billion, down from A$49.9 billion the previous year reflecting the fall in oil prices to which most Asian LNG is indexed.
  • According to recently released Chinese customs statistics, Australia supplied a record 30.7 Mt to China in FY 2021 , worth an estimated A$15.6 billion.  The previous record was 28.6 Mt in FY 2020. Supplies from Australia increased by 7.3%, notwithstanding trade tensions.
  • Month-ahead JKM Asian spot LNG pricesrose during July from US$14.20/MMBtu on 1 July (for August deliveries) to US$15.70/MMBtu on 30 July (for September deliveries). They then hit US$17/MMBtu on 6 August and have remained high, at US$17.15/MMBtu (A$22.16/GJ) on 12 August. Prices are being driven by high temperatures in Asia during the summer, preventing storage being refilled after an extended cold winter, and US cargoes heading to South America and away from Europe.
  • In July Australian LNG projects shipped 6.81 million tonnes (Mt) (99 cargoes), higher than the 5.85 Mt (85 cargoes) in June.  The record was 7.2 Mt (105 cargoes) in March 2021. Prelude shipped one less cargo and Gorgon and Ichthys were well up in July. All other projects were steady on June.
  • East coast spot prices have also reached record levels. Queensland short-term domestic gas prices in July were significantly higher than in June, averaging $14.45/GJ ($10.31/GJ in June) at Wallumbilla and $14.96/GJ ($10.80/GJ) in Brisbane.  These are the highest average monthly prices since the Brisbane market commenced in January 2012. 
  • Southern short-term domestic gas prices in July were also significantly higher compared to those inJune averaging $16.64/GJ ($11.06/GJ) in Sydney, $17.16/GJ ($11.41/GJ) in Adelaide and $15.35/GJ ($9.36/GJ)in VictoriaAverage monthly prices have not been at these levels since the Sydney and Adelaide markets commenced in 2010.
  • Higher east coast prices do not appear to result from higher domestic demand or tight supply. That appears to leave higher international prices as the most likely explanation The ACCC historic Wallumbilla LNG netback price, based on Asian spot prices, went from A$9.69/GJ in June to A$11.74/GJ in July and A$14.38/GJ in August. This appears to be conditioning price expectations in the east coast market.
  • Queensland exported gas to the other states in July, with flows in a westerly direction for the entire month. Net gas flows from Queensland to other states were 7.2 PJ in July.
  • NEM power generation in July from coal was a record low for this time of year, with generation down by 172 GWh. Coal’s share of NEM generation was only 64%, down from 67% a year earlier, with lower generation in NSW, but higher generation in Victoria and Queensland. Gas generation was down by 587 GWh. Gas-fired generation decreased in all states except NSW compared with June, and decreased its overall share of the market to 7%. 

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