Information about the EnergyQuest Australian LNG Monthly is available by clicking here.
| Hydrogen – cautious optimism, for the right applications A new National Hydrogen Strategy was released this month by the Australian Government and makes for interesting reading as one of the more moderate government-produced documents on hydrogen that we’ve seen. The Strategy says the breakeven price point for hydrogen to replace natural gas for heating is $1.20/kg H2, while the breakeven to replace diesel is $11.21/kg and for petrol it’s $13.31/kg.The Australia’s Low Emissions Technology Statement refers to a goal of achieving H2 production below A$2/Kg (A$14/GJ) so that hydrogen is competitive in export markets, which would require electricity costs to be at around A$20/MWh. This compares to the average wholesale spot price in Q2 2024 of $133/MWh.In our view the Strategy confirms that while hydrogen has a role to play, the current outlook suggests hydrogen is unlikely to replace natural gas demand any time soon.Competition for Asian LNG markets is heating up. Australian LNG imports to China fell 0.6 Mt (-24%) in July 2024, compared to June 2024, with Qatar and USA picking up the volumes. For Korea, Australia lost its position as Korea’s largest LNG supplier to the USA. Australian import volumes to Korea fell 0.3 Mt (-38%), and the USA gained 0.5 MT (+230%). Taiwan and Japan imports from Australia were largely unchanged. Monthly statistical summary Australia’s August 2024 shipments were 80.7 Mtpa on an annualised basis, compared to 81.1 Mtpa for the calendar year 2023 and 76.6 Mtpa for July 2024. August 2024 shipments represented 91.1% of nameplate capacity. EnergyQuest estimates that Australian LNG export revenue in August was $5.57 billion, higher than the $5.13 billion in July, but reflecting a 5.1% decrease compared to August 2023 when revenue was $5.87 billion. WA projects earned export revenue of $3.43 billion, Queensland projects brought in $1.67 billion, and NT projects earned $0.47 billion. West coast (WA and NT) shipments were higher at 4.80 Mt in August, up from 4.60 Mt in July. There were 68 cargoes in August, compared to 65 in July. A year ago, the west coast shipped 71 cargoes totalling 4.94 Mt. West coast projects operated at 90.4% of nameplate capacity during August. Queensland LNG shipments were higher at 2.05 Mt in August compared to 1.91 Mt in July. There were 30 cargoes during August, compared to 28 in July 2024, and two more than the 28 cargoes of 1.91 Mt in August 2023. The Queensland projects operated at 92.6% of nameplate capacity during August. Gas used for east coast gas-fired power generation increased 17% in August compared to August 2023, after increasing by 83% in July 2024 compared to July 2023, and by 93% in June 2024 compared to June 2023. This surge in demand led to a 19.7% increase in spot market gas prices in June compared to May. However, the average spot market price in July retreated by 17.4% compared to June’s elevated prices, with the average spot market price in July 2024 at $13.20/GJ. In August, the average spot market price declined further by 6%, averaging $12.42/GJ, which is 3.5% above the $12/GJ government cap. |