CANBERRA: Australia becomes a LNG export powerhouse. After years of delays and billions of dollars wasted from postponements, the final two projects of the initial six LNG projects, tapping into giant natural gas basins in the north and northwest waters off Australia are finally ready. Shell’s Prelude FLNG project, which was once planned to be the first FLNG project in the world until Petronas FLNG Satu and Golar LNG beat them to it – is now ‘materially ready’ to begin production, while Inpex’s Ichthys project is scheduled for a Q218 operational start-up after years of delays. The struggles with meeting timelines isn’t confined to Shell and Inpex; with the exception of Darwin LNG, all of the major Australia north-western projects have struggled with workforce issues and service operations. The slump in crude & LNG prices also thwarted the once best laid plans.
But finally it is done. Australia’s six major LNG projects have added some 41 mtpa of LNG to a global demand base that is still growing strongly. Between now and 2035, natural gas demand is expected to grow at an average of 2% per year; twice the rate of total global energy demand. Demand for LNG is set to increase at an average of 4% per year. This year China overtakes South Korea’s massive appetite for the super-cooled and clean(er) fuel. Japan still holds its number one importer for now. Asian demand grew by more than 17 million tonnes, beating industry predictions going into the year. That is nearly as much as the total volume that Indonesia, the world’s 5th largest exporter, produced in 2017. However there are challenges that come with high LNG consumption growth. Namely, infrastructure. In China, where demand for LNG is expected to double within the next six years, LNG tanks were full to the brim last winter, and it could take no more, resulting in the tanks closed for a few weeks.
