CANBERRA: Australia’s LNG exports will increase by 40 per cent to 51 million tonnes (mt) in the 2016-2017 fiscal year, and bring an additional 15mt on stream by next summer, according to government figures. In its latest quarterly energy and resources report, Department of Industry, Innovation and Science (DIIS) forecasts an increase in operational capacity to 66mt by next summer, as production starts on the second and third trains at Chevron-led Gorgon LNG and on the second train at ConocoPhillips’ Australia-Pacific LNG.
The DIIS report predicts that the value of exports for the fiscal year will increase 41 per cent to US$23 billion. However, the DIIS says it has revised down by 2mt the forecast it published in June. That reflects the extent to which project development has slowed. Santos plans to operate the two trains at Gladstone LNG below capacity, as low prices restrict capital expenditure.
Australian producers are also contracted to sell their cargoes to Japan and South Korea, where demand growth has slowed, and China. The DIIS says the average LNG price hardened over the summer, but remains at a record low, reflecting LNG oversupply as the US has started its first exports. Ichthys LNG and Wheatstone LNG are due to start production by year-end 2017. Both are expected to bring their second trains into production in 2018, which is also the target start date for Australia’s first floating LNG venture, the Shell-led Prelude project.
