EnergyQuest January 2019 LNG Report

EnergyQuest has released its January 2019 LNG Report. Some of the highlights are:

  • Total Australian LNG shipments were lower in January at 6.3 million tonnes(Mt) (94 cargoes), compared with 6.6 Mt (98 cargoes) in December. 
  • Australia’s January shipments were 74 Mtpa on an annualised basis.January production was prior to Ichthys reaching full capacity (8.9 Mtpa capacity) and the start-up of Prelude (3.6 Mtpa capacity).
  • Australia continues to be the largest LNG supplier to China, supplying 37% of Chinese LNG imports in December.  Australian projects delivered 36 cargoes to China in January, up from 34 in December and similar to 39 in November.
  • The Brent oil price has increased in January from its low of US$50.57/bbl in late December to a high of US$62.18/bbl on 21 January.  At the end of January, the Brent oil price had fallen slightly to US$59.71/bbl. Sling North Asian spot LNG prices have fallen over this period from US$8.91/MMBtu (February delivery) on 3 January to a 17-month low of US$6.80/MMBtu (March delivery) on 7 February. Spot prices at the same time last year were US$10.28/MMBtu. Spot price futures for March and April continue to moderate to US$7.30/MMBtu andUS$6.72/MMBtu respectively
  • East coast LNG shipments increased to 1,958 kt in January (1,795 kt in December), with 29 cargoes in January compared to 27 in December.
  • West Coast shipments decreased to 4.3 Mt in January (4.8 in December), with 65 cargoes in January compared to 71 in December.  Ichthys continued to increase production with 2 more cargoes shipped in January compared to December.
  • There is a seasonal pattern of gas flows to Queensland from the southern states. Queensland imported gas from other states over the month, with flows mostly in an easterly direction across the month.  Flows reversed in late January and started to flow in a westerly direction. 
  • CSG production from fields operated by the LNG producers was 118 PJ in January, up 1.5 PJ from 117 PJ in December. Total LNG pipeline flows were 114 PJ in January, same as 114 PJ in December.
  • Queensland short-term domestic gas prices in January were lower than those in December, averaging $10.00/GJ at Wallumbilla ($10.07/GJ in December) and $9.75/GJ ($10.15/GJ) in Brisbane.
  • Southern short-term domestic gas prices in January were also lower than those in December.
  • EnergyQuest estimates of east coast LNG netbacks at the end of January were higher than east coast domestic short-term gas in Victoria, but lower than east coast domestic short-term gas in Adelaide, Brisbane and Sydney. Based on North Asian spot LNG prices of US$7.80/MMBtu the EnergyQuest estimate of the Wallumbilla netback was $7.78/GJ at the end of January (below the ACCC end-January estimate of $9.77/GJ). Taking account of transport costs LNG netbacks were $8.46/GJ in Brisbane (end-month STTM $9.43/GJ), $9.85/GJ in Sydney ($11.19/GJ), $9.63/GJ in Adelaide ($9.98/GJ) and $10.23/GJ in Victoria($9.78/GJ).
  • East coast gas-use for power generation was up by 12% (2.0 PJ) compared with a year earlier and significantly higher than in December. Gas-use was up by 0.4 PJ in NSW, 1.1 PJ in South Australia and 1.9 PJ in Victoria.  Gas-use was downby 0.4 PJ in Queensland and 1.0 PJ in Tasmania.

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