Australian liquefied natural gas (LNG) exports rose 3.4 percent in November to 5.2 million tonnes as compared to the previous month, according to a monthly report by the energy consultancy, EnergyQuest.
Australian LNG export projects shipped a total of 79 cargoes in November, compared to 76 cargoes in October.
West coast LNG projects shipped 3.5 million mt in November, up from 3.3 million mt in October, due to higher Gorgon output. Annualised this stands at 42.6 million mt or 85.2 percent of nameplate capacity including Chevron’s Wheatstone LNG project. East coast LNG exports were steady at 1.7 million mt.
EnergyQuest estimates that export revenue jumped 5.5% in November to $2.32 billion. According to the consultancy, Western Australia exports in November were valued at $1.40 billion, Queensland exports at $0.8 billion and Darwin exports at $0.1 billion.
The consultancy forecasts 2017 LNG exports will be around 56 million mt, up 24 percent on 2016, with export revenue of around $25.5 billion, up 42.5 percent from 2016.
LNG prices tighten
EnergyQuest said in the report that LNG prices have tightened when they were expected to soften.
The conventional wisdom has been that there is a tsunami of new LNG coming that will depress LNG prices, the consultancy said.
“That might still happen but instead of falling LNG prices have risen, with North Asian spot prices hitting US$10/MMBtu and average October import prices up 9% on a year ago,” it said.
North Asian LNG spot prices continue to climb. As at December 11, the Sling North Asia Index of LNG spot prices was $10.02/MMBtu (A$12.55/GJ) for January deliveries.
According to EnergyQuest, LNG prices were significantly higher than east coast domestic prices.
Short-term domestic gas prices in November were slightly above October levels.
“Average prices in November were $7.30/GJ in Brisbane ($7.18/GJ in October), $7.17/GJ in Sydney ($6.92/GJ), $6.97/GJ in Adelaide ($6.49/GJ) and $6.32/GJ in Victoria ($6.06/GJ),” the report said.
With higher LNG spot prices, LNG netbacks are higher than east coast domestic short-term gas prices.
Based on marginal costs and spot LNG prices of $9.89/MMBtu the Wallumbilla netback was $9.62/GJ at the end of November, the consultancy said.
Taking account of transport costs, short-term prices were between $2.20/GJ (in Brisbane) and $5.63/GJ (in Victoria) below LNG netbacks.
“To be indifferent between LNG spot sales and domestic sales an LNG producer would need to realise prices ranging from $10.30/GJ in Brisbane to $12.52/GJ in Victoria,” EnergyQuest said.