EnergyQuest June 2018 LNG Report

16 July 2018

EnergyQuest has just released its June 2018 LNG Report. Some of the highlights are set out below:

  • Total Australian LNG exports surged by 9.3 Mt (18.5%) to 59.7 Mt in 2017-18. The biggest drivers of increased shipments were Chevron’s new projects. Shipments from Gorgon grew by 6.9 Mt to 12.7 Mt while the start-up of Wheatstone produced 2.1 Mt. Both projects have further room to grow this year, towards Gorgon’s nameplate capacity of 15.6 Mtpa and Wheatstone’s 8.9 Mtpa. 
  • The growth in exports was driven by increased deliveries to China of 6.5 Mt,particularly from Gladstone but also from west coast projects. China accounted for 34% of Australian LNG deliveries in 2017-18. However, Japan was still the biggest LNG customer, accounting for 46% of deliveries. Deliveries to Japan increased by 2.1 Mt in the year. Deliveries to Korea also increased (by 0.5 Mt) and comprised 11% of deliveries, coming from both east and west coast projects.
  • EnergyQuest estimates LNG export revenue was $30.8 billion in 2017-18, up 38% on the previous year due to both higher export volumes and higher prices, reflecting higher oil prices to which LNG prices are indexed.
  • Asian spot LNG prices have risen during June and the Platts JKM reached US$11.60/MMBtu in mid-June (for July deliveries) before dropping to $10.37/MMBtu (for August deliveries) late in the month. 
  • West coast LNG projects shipped 3.8 Mt in June (up from 3.2 Mt in May). East coast LNG exports increased to 1.63 Mt in June, up from the 1.57 Mt seen in May. 
  • Queensland continues to be self-sufficient for gas.  In May gas flowed west for the entire month at a net rate of 2.8 PJ. This continued in June with flows in a westerly direction for the entire month. 
  • CSG production increased slightly. Production from fields operated by the LNG producers was 111 PJ in June, up from 106 PJ in May. Total LNG pipeline flows were 97 PJ in June compared with 98 PJ in May.
  • Queensland short-term domestic gas prices in June were well above those in May. Southern short-term domestic gas prices in June were also above May levels. 
  • As at the end of June LNG netbacks were higher than east coast domestic short-term gas prices. 

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