Information about EnergyQuest’s ‘LNG and energy essentials’ report is available by clicking here.
| Does the east coast market still need LNG imports? This month, the Australian Energy Market Operator (AEMO) released its east coast market Gas Statement of Opportunities (GSOO) for 2025. The most notable finding in this year’s edition is that forecast shortfalls in east coast supply have been pushed out by a year or two. Peak day shortfalls are now expected from 2028 (previously 2026, as per the 2024 GSOO), while annual shortfalls are expected from 2029 (previously 2028 in the 2024 GSOO). peak shortfalls now from 2028, later than GSOO 2024 due to falls in industrial consumption, and delayed retirement of coal-fired power generator, Eraring which reduces GPG in the near term structural gaps are forecast from 2029, or seasonal gaps from 2028 if there is sustained high gas usage all scenarios need new investment in supply A read of the substance of the GSOO reveals that the reason that the shortfalls have been pushed back is a fall in forecast domestic gas demand. In a domestic market of approximately 502 PJ/a, AEMO’s forecast has decreased domestic demand in 2026 by 70 PJ (-13%) and 55 PJ (-11%) in 2027, compared to the 2024 GSOO. An important point is how this reduced gas demand is to be achieved. Rather than by increasing renewable energy generation, gas has been replaced in the forecasts by coal. Government underwriting of ongoing extensions of Eraring beyond the expected retirement on 19 August 2027, and potentially also Yallourn in Victoria which is expected to retire on 1 July 2028, may therefore continue to be a politically attractive get out of jail free card that assists in both the electricity and gas markets. If such a dynamic persists until the 2030s then LNG imports may not materialise at all given that current Queensland LNG export contracts are due to expire during the mid-2030s, meaning the level of export demand and residual gas available to support domestic customers is uncertain beyond that point. We wouldn’t be ruling out LNG imports just yet, but the investment case has certainly changed significantly. Monthly statistical summary EnergyQuest estimates that Australia exported 7.11 Mt of LNG in March 2025, totalling 101 cargoes. This is an increase compared to February 2025, which saw Australia export 6.07 Mt and 87 cargoes. When annualised, March’s exports represent 83.7 Mtpa, equivalent to 97.2% of total Australian nameplate capacity. EnergyQuest estimates that Australian LNG export revenue in March was A$5.59 billion, higher than February’s A$4.93 billion, and down by 6% from March 2024 (when it was A$5.94 billion). WA projects earned A$3.28 billion in export revenue, Queensland projects earned A$1.78 billion, and NT projects earned A$0.53 billion. WA projects (NWS, Pluto, Gorgon, Prelude, and Wheatstone) combined shipped 59 cargoes during March for 4.17 Mt, compared to 48 cargoes for 3.38 Mt in February, 54 cargoes in January for 3.80 Mt. During March 2025, Queensland’s three Gladstone projects shipped 33 cargoes for a combined total volume of 2.26 Mt – much higher than the February total of 29 cargoes for 1.95 Mt. The higher amount was anticipated, again due to February’s three less operating days. The March result was only one cargo less than the record 2.35 Mt total achieved in December 2024 (34 cargoes). The NT (Ichthys) shipped nine cargoes for 0.68 Mt compared to 10 cargoes for 0.74 Mt in February. |