• LNG shipments from Australia on target for a record this year
  • ‘Gladstone projects exceeded nameplate capacity for the first time since exports started in January 2015’
  • ASX Gas Stocks Guide: Everything you need to know

 

Liquefied natural gas (LNG) shipments from Australia are on course to hit a record 78 million tonnes in 2020, up from 77.5 million tonnes in 2019.

November was a strong month for Australian LNG exports, with 6.9 million tonnes of cargo departing by ship last month, and the highest since April.

“One of the reasons for the strong performance was record production from the east coast LNG projects at Gladstone,” said Adelaide-based LNG consultancy EnergyQuest in a report.

“Taken together, the Gladstone projects exceeded nameplate capacity for the first time since exports started in January 2015,” said the consultancy that closely monitors the LNG market in Australia.

For the year-to-date ended November, Australia has shipped 71.5 million tonnes of LNG cargo, compared with 70.3 million tonnes for the similar 2019 period.

Australian LNG shipments ran 1.2 million tonnes ahead of schedule in November, and are expected to total 78 million tonnes for the 2020 year.

“Australia’s November shipments were 84.1 million tonnes on an annualised basis,” said the EnergyQuest report.

 

Largest export markets for LNG are Japan and China

Japan and China, the two largest markets for Australian LNG, each took delivery of 2.6 million tonnes of LNG cargo last month.

Cargo prices have underperformed in 2020, resulting in a crash in export revenue that dipped to $1.8bn in September from $4.4bn in March.

“The good news is that revenue is starting to recover with higher oil and LNG spot prices,” said EnegyQuest chief executive, Graeme Bethune in the report.

Export revenue for Australian LNG shipments is forecast to reach $2.9bn in November.

“LNG spot prices have staged a remarkable recovery,” he said.

The price of LNG cargoes for January delivery to Japan, Korea and Taiwan touched $US11.23/MMBtu in mid-December, representing a 26-month high.

LNG spot prices in the north Asian market had cratered to $US2/MMBtu back in June.

Stronger LNG prices are the result of several factors including, expectations of colder weather in the northern hemisphere.

Another factor in higher prices is supply disruptions following maintenance to some Australian LNG export installations.

Australian LNG shippers dispatched 91 cargoes to the three major markets of China, Korea and Japan in November, up from 83 shipments in November 2019.

 

Fewer export cargoes are delayed in November

A total of 39 LNG cargoes were shipped to Japan in November, up from 37 in October, and ahead of China’s volume of 38 cargoes in November.

Korea doubled its demand for LNG Australian cargoes to 14 in November, compared to 7 shipments for the year ago period.

In October, LNG shippers dispatched 6.7 million tonnes of cargo from Australia.

Cargo delays, a common feature of the Australian market this year, have continued to subside as demand has increased from Asian customers.

A total of 16 LNG cargoes were delayed for more than three days in November, as they waited for final destination orders.

This is compared with 19 delayed ships in October, the same number as September.

Australian LNG shippers dispatched 91 cargoes to the three major markets of China, Korea and Japan in November, up from 83 shipments in November 2019.

 

Five LNG import terminals are planned for Australia

Meanwhile, plans are advancing for more LNG import capacity in Australia with two import terminals making progress toward construction.

Viva Energy has entered into a deal with two consortia to develop an LNG regasification terminal at its existing Geelong oil refinery.

One partnership deal is with Engie Australia and New Zealand and Japanese conglomerate Mitsui & Company, and the other is with Vitol and VTTI.

The development is the fifth planned terminal in Australia for imports of LNG, and the second in the state of Victoria.

AGL Energy has been moving forward with plans for a LNG imports terminal at Victoria’s Cribb Point.

Apart from the larger ASX gas stocks of Santos (ASX:STO) and Woodside (ASX:WPL) there are a number of smaller ASX players in the gas market.

They include Blue Energy (ASX:BLU) with its Queensland and Northern Territory projects that are the centrepiece of Australia’s new gas supply plan.

Plus, Central Petroleum (ASX:CTP) in the Northern Territory and Senex Energy (ASX:SXY) with its Surat Basin projects in Queensland.

 

ASX Share Prices for Blue Energy (ASX:BLU), Central Petroleum (ASX:CPT), Santos (ASX:STO), Senex Energy (ASX:SXY), Woodside (ASX:WPL)

 

 

 

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