CANBERRA: The Australian government expects its crude and condensate output to increase to 380,000 b/d in fiscal 2017-2018 (July to June), up 21% year on year, on additional condensate production from the country’s new LNG projects. Australian LNG production is set to double from 43 million mt in 2016 to more than 80 million mt in 2019, which would be even more than Qatar’s estimated annual production of 77 million mt, making it the largest producer of LNG, according to Platts Analytics. Three more LNG projects — Wheatstone, Ichthys and Prelude — are due to startup in 2017, following the commissioning of the Chevron-led Gorgon LNG project last year. Condensate production at Ichthys is expected to peak at 100,000 b/d, while Prelude and Gorgon are expected to peak at 36,000 b/d and 20,000 b/d, respectively, according to the Department of Industry, Innovation and Science’s Resources and Energy Quarterly report released earlier this week. Rising production and oil prices, following OPEC’s agreement to cut output, are expected to increase the value of Australia’s oil and condensate exports to $8.7 billion in fiscal 2017-2018, up $1.2 billion year on year.
In the short term, the outlook seems less positive, with production in the year ending June 2017 expected to be 314,000 b/d, slightly lower than the 317,000 b/d produced a year earlier. Third-quarter data showed that Australia produced 291,000 b/d of crude and condensate, down 17% year on year. Reduced production and low prices led to a 23% decline in the value of Australia’s crude and condensate exports year on year to $1.3 billion in Q3. Expenditure on oil and gas exploration fell 39% year on year in Q3 2016 to $355 million. In the refining sector, imports of oil products are expected to increase to 622,000 b/d in fiscal 2017-2018, up 4.2% year on year. Recently, Australia has seen a substantial increase in oil product imports, following the closure of two of its six refineries. Caltex Australia’s 135,000 b/d plant at Kurnell in Sydney was closed in October 2014, and BP’s 102,000 b/d Bulwer Island plant in Brisbane in July 2015.
Kurnell has been converted into a products import terminal and Bulwer Island is operating as an 80 million liter jet fuel import facility, supplying the nearby Brisbane airport. The remaining four domestic producers were expected to remain under pressure, as global refining capacity expands, driven by investments in non-OECD economies in the Middle East and Asia, particularly China, according to the report. BP still operates the 146,000 b/d Kwinana oil refinery in Western Australia. The nation’s other three refineries are Viva Energy’s 120,000 b/d Geelong facility in Victoria; ExxonMobil’s 85,000 b/d Altona plant, also in Victoria; and Caltex’s 109,000 b/d facility at Lytton in Queensland. Australia’s production of oil products declined 2.2% year on year to 453,000 b/d in Q3, the report added.
