Information about the EnergyQuest Australian LNG Monthly is available by clicking here.
| The Australian Government might not be done with market intervention The southern region of the east coast domestic gas market is heading towards annual supply shortfalls in 2028, with peak supply potentially running short sooner. So, what are the options to address the shortfall, and how might they impact the market? For the less than four years remaining, there are few options which may have an impact: find and develop more gas, decrease gas demand by either converting to other energy or shutting down demand, divert gas from Queensland LNG projects, or import LNG. By responding to calls for market intervention in 2022, the Australian Government has essentially bought itself ownership of this problem and, while none of the options are good, if prices do rise it seems likely that government will be forced to intervene once again. GIIGNL Annual Report 2024 Total LNG imported (trade) in 2023 was 401 Mt compared to 393 Mt imported during 2022, representing a modest 2.1% growth, which compares to the previous year’s growth rate of 5.6%, which was driven by rapid expansion in demand due to the Russian invasion of Ukraine. The GIIGNL report also shows the total imports (total demand) since 1996, indicating that trade was at 100 Mt in year 2000, 200 Mt in 2010 (10 years later), 300 MT in 2018 (eight years later), and 400 Mt in 2023 (five years later). This suggests that LNG trade is likely to continue increasing over the next decade or so. Monthly statistical summary In May, Australian LNG projects shipped 6.39 Mt (91 cargoes), lower than the 6.92 Mt (98 cargoes) shipped in April, which had one less day of production. The projects shipped an average of 2.9 cargoes per day, less than the 3.3 per day average in April 2024. During May, the three Queensland projects were impacted by some scheduled maintenance, notably QCLNG having the equivalent to half a train offline for 15 days. Gorgon in WA was well down, as it suffered a mechanical fault on a turbine on one of its three LNG trains on 30 April, which led to the LNG train being shut down while repairs were undertaken. EnergyQuest estimates that Australian LNG export revenue in May was $5.19 billion, less than the $5.43 billion in April, reflecting an 11% decrease compared to May 2023 when revenue was $5.83 billion. The issues at Blacktip in the NT, have required substantial support from Darwin’s two LNG projects into the NT domestic market. This has amounted to 11 PJ for the 18 months from 1 November 2022 to 30 April 2024. This is a substantial volume considering the total NT domestic gas market in 2023 was 23 PJ. Throughout all of May, Queensland exported gas to the southern states. The daily net flows exported in May averaged 241 TJ/day. The weekly flow south at the end of May 2024 of 346 TJ/d was the highest since July 2020. All the east coast short-term domestic gas prices increased in May. The average spot price increased to $13.35/GJ (+12.9%) in May 2024 compared to April. All prices were well above the $12/GJ price cap . East coast electricity demand increased by 1% in May compared to the same period a year earlier. The coal share of generation increased to be 62% of total generation on a slightly higher total demand volume overall, compared to 58% a year earlier. |