Oz LNG Exports in April Up 3%: EnergyQuest
Australian LNG exports in April were 6.9mn metric tons, marginally higher than 6.8mn mt in March, and up 3% yr/yr, energy consultancy EnergyQuest said in its monthly report published May 14.
“Notwithstanding the global surplus of LNG and slowdown in economic activity due to Covid-19, Australian LNG shipments are holding up well,” it said. Australia’s April shipments were 84.2mn mt/yr on an annualised basis.
Deliveries to China have been steady. Australian projects shipped 40 cargoes to China in April, after delivering 29 in March and 36 in April 2019. Australia delivered 36 cargoes to Japan, down on 46 delivered in March and 33 delivered in April 2019. The country delivered 10 cargoes to Korea in April, up on the deliveries of last year when 7 cargoes were delivered.
EnergyQuest said it is unlikely that there will be trains shut-in or major output cuts from Australian projects due to lower oil and LNG prices. “Most Australian LNG is sold under long-term oil-linked contracts and oil prices would need to remain very low for a considerable period for there to be shut-ins,” it said, adding indications are that west coast LNG projects are cash flow positive at oil prices above about US$15/barrel and east coast projects above US$25/b.
However, EnergyQuest said, there are likely to be fewer spot cargoes at current prices. In April there were no spot cargoes from the North West Shelf or Gorgon. Spot deals from other projects were at very low prices: for one cargo from Wheatstone at US$1.80-1.90/mn Btu and two cargoes from Ichthys and one cargo from Darwin, all believed to be at around US$1.70-1.75/mn Btu, it said.
On the east coast there was one spot cargo from APLNG and one Petronas spot cargo from GLNG because of cancellation by a buyer. “There is also evidence from Santos and Origin of buyers exercising downward contract flexibility (potentially reducing shipments by 5-10%). This may mean an increase in diversions to the domestic market on the east coast,” EnergyQuest said.