Australia, the world’s second-largest liquefied natural gas (LNG) producer, is expected to ship 58.1 million mt of the fuel in 2017-18, according to a report by the National Australia Bank.
This forecast is based on the assumption that some LNG terminals in Australia will run well below nameplate capacity, the financial institution said on Wednesday.
NAB’s forecast is down 5.2 million mt as compared to the Department of Industry’s 63.3 million tonnes of LNG over the period.
There are two LNG export development still under construction in Australia, namely Shell’s Prelude FLNG off the coast of Western Australia and the Inpex-operated Ichthys project in Darwin.
“When they are complete late this year and next year respectively, Australia will have a nameplate export capacity of around 85 million tonnes – the largest in the world,” NAB said in the report.
“However, we do not expect actual exports will reach this level as some of the Queensland LNG terminals will be forced to run well below capacity,” the bank said.
Australian LNG exports to total almost A$32.3 billion in 2017-18
With oil prices back on the rise and the Australian dollar set to depreciate a little further, the bank expects Australian LNG export prices to be higher in 2018.
NAB expects its LNG export price indicator to reach A$10.64/GJ in the first quarter of 2018, up from A$8.60/GJ in the third quarter of this year.
“We see export LNG over A$11.50/GJ by the end of next year, which will present a major challenge to domestic gas remaining in single figures despite government intervention,” it said.
To remind, the Australian government earlier this year announced a domestic mechanism under which it could restrict LNG exports, in a bid to ease domestic shortages which have been pushing domestic prices higher in Australia.
Since then, the three LNG producers on Curtis Island signed several deals to supply gas to domestic consumers.
“Since mid-year, (domestic) prices have trended lower and since the Commonwealth government’s agreement with gas suppliers in October, prices have sat at around $6-7/GJ,” the bank said.
On the value side, the price tag of Australian LNG exports is expected to reach A$32.3 billion (US$24.9 billion) in 2017-18, according to NAB.
These figures are expected to further climb to A$43.3 billion in 2018-19, NAB said.
LNG World News Staff