Information about EnergyQuest’s ‘LNG and energy essentials’ report is available by clicking here.
| Waving the white flag on price caps? The ACCC’s latest instalment of its ongoing inquiry into gas supply arrangements was released in December. To parse the commentary in the report, the Gas Market Code and associated price cap is not materially impacting price but does appear to have changed contracting behaviour to the detriment of gas buyers. There is significantly less gas being made available to the domestic market than there was immediately prior to the introduction of the Code and price cap. LNG imports appear to be inevitable to ensure supply, but may cost more than current domestic gas supply. None of the above points has prompted the ACCC or other parts of government to propose a strengthening of the Code, which suggests that by omission, the current position of government is that the price cap is no longer needed. In the end, while governments set the laws of the land they don’t have a say on the laws of economics and physics. It remains the case that the best solution to high prices is more supply. Many industrial processes cannot currently be done economically without natural gas, and the east coast gas infrastructure simply isn’t big enough to meet southern region demand solely from LNG feedstock in Queensland. Monthly statistical summary Australian LNG shipments for 2024 set a new annual record of 82.0 Mtpa, compared to 81.1 Mtpa in 2023, and the previous record of 81.3 Mt shipped during 2022. The 2024 revenue of $67.7 billion was less than the record $90.3 billion in 2022, and $74.3 billion during 2023, primarily due to a lower LNG prices, which was countered somewhat by a falling Australian dollar compared to the US dollar. Australia’s December 2024 shipments were 85.7 Mtpa on an annualised basis, compared to 80.9 Mtpa for November 2024. December 2024 shipments represented 97.3% of nameplate capacity. EnergyQuest estimates that Australian LNG export revenue in December was $2.38 billion, higher than the $5.76 billion in November, and reflecting only a 0.6% decrease compared to December 2023, when revenue was $6.42 billion. WA projects earned export revenue of $3.60 billion, Queensland projects brought in $2.06 billion, and NT projects earned $0.72 billion. Western Australia shipments were higher at 4.11 Mt in December, up from 3.83 Mt in November. There were 58 cargoes in December, compared to 55 in November. Northern Territory (Ichthys) had 11 shipments in December for 0.82 Mt, compared to November’s 8 cargoes for 0.60 Mt. Queensland LNG shipments set a new monthly record with December shipments being 34 cargoes for a combined 2.35 Mt, compared to 32 cargoes for 2.20 Mt in November, and slightly eclipsing the monthly record set in October 2024 which saw 34 cargoes for 2.33 Mt. |