Information about EnergyQuest’s ‘LNG and energy essentials’ report is available by clicking here.
| China responds to US LNG tariffs with a wet feather The global LNG market was rumbled this month with the announcement by the US of a 10% tariff on a range of imports from China, including LNG. In response, China announced it would levy a 15% tariff on US LNG and coal, and a 10% tariff on US oil. The US is, of course, literally half a world away from China and exports LNG from the eastern seaboard, meaning that USA LNG heading to China has a long way to go and must pass through the Panama Canal. Some US LNG still makes the journey, and in December 2024 3% of China’s LNG came from the US. For comparison, Australia exports around 10 times more LNG to China as does Qatar, and Australian and Qatari shipments to China make up almost two thirds of China’s total LNG supply. In other words, China is not reliant on the US for LNG supply and wouldn’t have too much trouble picking up supply from other markets to replace US volumes. What is more significant for Australia than a low-key LNG trade war are the rising volumes of LNG coming into China from Qatar while Australian LNG exports to China are falling. Qatar’s share of the Chinese LNG market rose from 25% in December 2023 to 30% in December 2024. The world’s loneliest LNG vessel A further indication of the flexibility in LNG supply is the recent news that the Elisa Ardea LNG tanker is heading to France after picking up its cargo from the Wheatstone LNG project. The LNG was loaded from 5 to 6 February 2025 and is due to arrive in Dunkirk, France on 7 to 8 March 2025. Our tracking indicates the ship should soon be rounding the Cape of Good Hope, having avoided the Suez Canal route. For a few weeks at the bottom of the Indian ocean it must have been the world’s loneliest LNG vessel. It is not often that Australian LNG makes it all the way to Europe, with the previous cargo being shipped over two years ago from the North West Shelf (NWS) to Rotterdam. Monthly statistical summary Australia’s January 2025 shipments were 80.3 Mtpa on an annualised basis, compared to 82.0 Mt during 2024, 81.1 Mtpa for the 2023 calendar year, and 85.7 Mtpa for December 2024. January 2025 shipments represented 90.6% of nameplate capacity. EnergyQuest estimates that Australian LNG export revenue in January 2025 was $5.73 billion, lower than $6.24 billion in December 2024, and reflecting a 5.9% decrease compared to January 2024, when revenue was $6.09 billion. Western Australia projects earned export revenue of $3.19 billion, Queensland projects brought in $1.80 billion, and Northern Territory projects earned $0.74 billion. In December 2024, Queensland LNG shipments set a new monthly record, with 34 cargoes totalling 2.35 Mt, but this was not replicated in January 2025 when total LNG shipments were 32 cargoes for 2.14 Mt. The January result was also slightly down on tonnage compared to the 32 cargoes for 2.20 Mt and in November and in October when total Queensland shipments were 34 cargoes for 2.33 Mt. |