Information about the EnergyQuest Australian LNG Monthly is available by clicking here.
| Is the future of Australian gas overseas? This month saw two of the biggest investment decisions made by the Australian petroleum industry in recent years, but they weren’t investments in Australia. Instead, Woodside announced that it would acquire Tellurian and Driftwood LNG in a deal worth US$1.2 billion (A$1.8 billion) and OCI’s clean ammonia project for US2.35 billion (A$3.6 billion) – both located in the US. Woodside has comparable investment opportunities in Australia to those it just made in the US, but Australia lost out. If investors continue to vote with their bank accounts and go elsewhere, the result will be declining petroleum production in Australia, potentially, or likely, occurring faster than demand for petroleum falls. Another country with some similarities to Australia has been down a similar route in recent history. New Zealand banned petroleum exploration in 2018, and natural gas reserves have rapidly declined. New Zealand has the benefit of ample hydroelectricity, which provides 57% of the country’s electricity, but a combination of low hydro lake levels and a lack of gas has meant New Zealand electricity prices recently reached sustained record highs above NZ$800/MWh (A$732/MWh) with numerous spikes higher. New Zealand’s Energy Minister is now talking about importing LNG to fill the energy shortfall. Monthly statistical summary Australia’s July 2024 shipments were 76.6 Mtpa on an annualised basis, compared to 81.1 Mtpa for the calendar year 2023 and 81.5 Mtpa for June 2024. July 2024 shipments represented 86.5% of nameplate capacity. EnergyQuest estimates that Australian LNG export revenue in July was $5.09 billion, the same as the $5.09 billion in June, but reflecting a 5.5% decrease compared to July 2023 when revenue was $5.38 billion. As winter demand for gas increased in the east coast southern states, gas flows from Queensland reached 447 TJ/d on 18 July, which eclipsed the record rate of 428 TJ/d on 13 June, confirming that additional capacity on the pipeline from Queensland is operational. Prior to June there were no daily flows noted above 400 TJ/d. Record gas flows south from Queensland in June and July were necessary to support gas-fired power generation (GPG) during a ‘wind drought’, particularly in the southern states, as well as low hydro generation and reduced solar production during in winter. Gas used for GPG increased 83% in July 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. |