EnergyQuest Australian LNG Monthly October 2021

EnergyQuest has just released its Australian LNG Monthly for October 2021.

In our latest report we take a look at the long-term outlook for LNG, both globally and for Australia, drawing on projections by the IEA, Morgan Stanley and the federal government. The biggest challenge for Australian LNG is not net zero. Australia has already done carbon-neutral LNG. The challenge is insufficient gas reserves. While everyone is focused on possible hydrogen exports, there is a risk of neglecting LNG, something in which Australia is already a world leader. Relevant to this, we also look at Woodside’s recent reserves write-downs. Is there more to come?

Australia has been insulated so far from the spike in global gas prices.  However households are already feeling the impact of higher petrol prices, up by 25% over the last 12 months according to ABS. Higher petrol prices are not necessarily a bad thing if Australia is aiming for net zero. Higher petrol prices should also encourage take-up of EVs.

The report also has the highlights of the NEM in October. Renewables reached a record 28% market share, with coal down to 60% and gas down to 4%.

Some of the other highlights of the report are:  

  • In October Australian projects shipped a record 7.23 million tonnes (Mt) (105 cargoes), higher than the 6.96 Mt (101 cargoes) in September. 
  • EnergyQuest estimates that Australian LNG export revenue increased in October to $5.21 billion, up from $4.90 billion in September and up by 188% on October 2020.
  • Compared with September, Australian projects delivered five fewer cargoes to Japan, Korea, Malaysia and Singapore in October, but six additional cargoes to China and Thailand.
  • West coast shipments increased to 5.1 Mt in October (4.9 Mt in September), with 73 cargoes in October compared to 70 in September.
  • East coast shipments increased to 2.1 Mt in October (2.1 Mt in September), with 32 cargoes compared to 31 in September.  
  • There were three spot cargoes reported from the east coast in October and five spot cargoes from the west coast (8% of total shipments).
  • Queensland imported gas from the other states in October, with flows in an easterly direction for the majority of the month. Net gas flows to Queensland from other states were 3.2 PJ in October.
  • Notwithstanding continued high LNG spot prices, Queensland short-term domestic gas prices in October were steady at Wallumbilla averaging $8.28/GJ ($8.28/GJ in September) and slightly higher averaging $8.44/GJ ($8.36/GJ) in Brisbane, compared to those in September.  Southern short-term domestic gas prices in October were higher compared to those in September in Sydney averaging $8.22/GJ ($8.06/GJ) in Sydney and $7.64/GJ ($7.22GJ) in Victoria, but lower averaging $8.36/GJ ($8.46/GJ) in Adelaide. 

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