EnergyQuest March 2019 LNG Report

Some of the highlights from the EnergyQuest March 2019 LNG Report are:

  • Total Australian LNG shipments were higher in March at 6.3 million tonnes (Mt) (93 cargoes), compared with 5.6 Mt (82 cargoes) in February.  The rise is largely, but not entirely due to February being a shorter month.  
  • Australia continues to be the largest LNG supplier to China, supplying 42% of Chinese LNG imports in February.  Australian projects delivered 32 cargoes to China in March, well up from 26 in February, and similar to 36 in January, 34 in December and 39 in November. APLNG was strong in the Chinese market, with 10 delivered cargoes going to China in March.
  • There is, as yet, no sign of Chinese buyers reducing Australian shipments to buy cheaper spot cargoes elsewhere.
  • The Brent oil price has strengthened from a low of US63.71/bbl on 1 March it rose steadily to US$68.35/bbl on 21 March.  Sling North Asian spot LNG prices have fallen from US$6.03/MMBtu (April delivery) on 4 Marchto US$4.42/MMBtu (May delivery) on 28 March. Spot prices at the same time last year were US$7.05/MMBtu. There is a gap between oil -linked and spot LNG prices. Oil-linked prices with a slope of 12% are US$8.50/MMBtu at an oil price of US$70.87/bbl.
  • Asian spot prices have fallen to their lowest for this time of year since 2016 as more supply has entered the market from Egypt and Australia. 
  • East coast LNG shipments increased to 1,973 kt in March (1,664 kt in February), with 29 cargoes in March compared to 25 in February.
  • West Coast shipments increased to 4.3 Mt in March (3.9 in February), with 63 cargoes in March compared to 57 in February.  Ichthys maintained production with 2 more cargoes shipped in March compared with February.
  • CSG production from fields operated by the LNG producers was 117 PJ in March, up 6.4 PJ from 111 PJ in February.
  • Queensland short-term domestic gas prices in March were lower than those in February, averaging $8.97/GJ at Wallumbilla ($9.18/GJ in February) and $9.28/GJ ($9.23/GJ) in Brisbane.
  • Southern short-term domestic gas prices in March were higher than those in February, averaging $10.42/GJ in Adelaide ($10.22/GJ) and $10.00/GJ ($9.60/GJ) in Victoria, but lower in Sydney at $10.27/GJ ($9.86/GJ).
  • EnergyQuest estimates of east coast LNG netbacks at the end of March were much lower than east coast domestic short-term gas. Based on North Asian spot LNG prices of US$4.45/MMBtu the EnergyQuest estimate of the Wallumbilla netback was $3.80/GJ at the end of March.
  • East coast gas-use for power generation was up by 16% (2.02 PJ) compared with a year earlier but lower than in February.
  • The landed cost of LNG imports into Melbourne based on Asian spot prices could be $8.60-10.50/GJ, below domestic prices.

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