CANBERRA: The eastern Australian state of Queensland, home to the world’s first coalseam gas-to-LNG industry, is now producing more of the commodity than traditional supplier Russia, consultancy EnergyQuest said in its latest quarterly report. Australia’s LNG production increased by 53.2% quarter on quarter to 10.1 million mt in the three months to March 31, 2016, EnergyQuest said in the report released earlier this month.
The increase in output came on the back of the ramp-up in production from the Australia Pacific LNG and Gladstone LNG projects in Queensland, as well as the start of shipments from the Chevron-operated Gorgon project in Western Australia. Queensland alone exported 3.8 million mt of LNG, more than Russia’s total shipment of 2.5 million mt, in Q1, according to EnergyQuest.
“Queensland’s performance is extraordinary, from zero LNG exports as recently as 18 months ago to more than Russia already,” said EnergyQuest CEO Graeme Bethune. “Queensland’s LNG projects have all ramped up more quickly than expected and are near or exceeding nameplate capacity. The whole process has been very well managed with little apparent market disruption.” Queensland joined the ranks of global LNG exporters in early 2015, when the first shipment left the then BG-operated Queensland Curtis LNG project in Gladstone.
Queensland Curtis LNG, which has a nameplate capacity of 8.5 million mt/year, has since been followed into production by the 7.8 million mt/year Gladstone LNG project, operated by Santos, and train one at the 9 million mt/year Australia Pacific LNG facility.
The second train at Australia Pacific LNG, operated by Origin Energy and ConocoPhillips, is expected to ship its first cargo in the fourth quarter of 2016. EnergyQuest said Queensland Curtis LNG, now owned by Shell, shipped 31 cargoes or 2.1 million mt in Q1. Gladstone LNG shipped 16 cargoes or nearly 1 million mt and Australia Pacific LNG shipped 11 cargoes or 700,000 mt.
LNG output is now the largest component of Australia’s petroleum production and the nation is set to overtake Qatar as the world’s largest exporter before the end of this decade. By then, Australia will have aggregate LNG production capacity of 86.6 million mt/year at 10 LNG export projects.
Although the average price of Australia’s LNG exports declined 36% quarter on quarter in the three months to the end of March due to the fall in oil prices, the country’s revenue from the shipments of A$4.469 billion was only down slightly from the corresponding period of 2015 as a result of the growth in volumes, EnergyQuest said.
Meanwhile, the Gorgon project is still in the process of restarting after being shut in late March due to a problem with the propane refrigerant circuit, a Chevron spokesman said this week. The project had shipped only one cargo prior to the shutdown. Before the closure, Gorgon’s train one had ramped up production to around 90,000 b/d of oil equivalent (10,143 mt/d of LNG), Chevron said previously. Gorgon’s three production trains each have a capacity of 5.2 million mt/year, with trains two and three set to startup at six-month intervals.
