EnergyQuest Australian LNG Monthly September 2020

EnergyQuest has just released its Australian LNG Monthly for September 2020. Some of the highlights are as follows:

  • As Victorian gas production moves closer to the cliff  LNG import facilities are imperative.
  • Australian LNG shipments in September were lower compared with August, primarily due to decreased production at the North West Shelf and Gorgon projects
  • Shipments in the six months from April, the start of COVID-19, are 37.9 Mt, down by 3.8% from the same period last year. The pandemic and flat LNG market has clearly had some impact on LNG exports. While total Chinese LNG demand has grown, demand from Japan and Korea is down. In a total context though a decline of 3.8% is modest given the impact of COVID-19 on importing countries and the complexities of LNG production and shipping during a pandemic.
  • Due to good production performance in the first quarter LNG export volumes are running in line with 2019. In the nine months to September Australia exported 57.7 Mt, just slightly more than 57.4 Mt exported in the same period last year. Australia may strengthen its position as the world’s largest LNG exporter in 2020.
  • The main impact of the virus and fall in oil prices is on revenues. LNG revenues in August (the latest data) were $2.1 billion, well down from $4.4 billion reached in March prior to the drop in oil prices. In the eight months to August this year total revenue was $27.4 billion, down $5.1 Billion or 15.7% from 2019.
  • Deliveries to major North Asian markets were higher in Septembercompared with September 2019. Australian projects delivered a total of 84 cargoes to China, Japan and Korea in September, up from 82 cargoes a year earlier. 
  • LNG spot cargo prices are continuing to increase with cargoes for November delivery reported at US$4.50-5.00/MMBtu (A$6.68/GJ), significantly higher than Queensland short-term domestic gas prices in September whichaveraged A$4.46/GJ at Wallumbilla and A$5.05/GJ in Brisbane. As of 14 October, the Platts JKM was US$5.59/MMBtu.
  • Electricity generation continues to be largely unaffected by restrictions caused by COVID-19. East coast generation was only down by 3% in September compared with a year earlier.
  • East coast gas-use for generation was well down, by 9.15 PJ (-58%) on a year earlier and 5.86 PJ lower compared with August, being replaced by solar and wind generation. Gas-use for generation of 6.7 PJ was the lowest since our monthly records commenced in July 2017. Gas-use in September 2019 was 15.8 PJ, a September record. Some major stations appear to have been offline for part of September, notably Tallawarra but also possibly Darling Downs and Condamine A.

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