26/04/2018 - 12:48

Doubt over Australian supremacy in LNG

26/04/2018 - 12:48

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Consulting group Energy Quest has cast doubt over the long-held expectation that Australia will overtake Qatar as the world’s largest LNG producer, in part because of the anticipated decline in production at Woodside Petroleum's North West Shelf project.

Gorgon shipped 17 cargoes in March.

Consulting group Energy Quest has cast doubt over the long-held expectation that Australia will overtake Qatar as the world’s largest LNG producer, in part because of the anticipated decline in production at Woodside Petroleum's North West Shelf project.

The federal government's department of industry, innovation and science is forecasting Australia's LNG production reaching Qatar’s level of 77 million tonnes in 2020-21 and eclipsing it in the following year.

Wood Mackenzie’s Saul Kavonic is more bullish, recently predicting Australia would move into the top spot by the end of this year or in 2019.

However, Energy Quest said any overtake was dependant on a number of variables.

“Whether or not Australia overtakes Qatar depends on the ramp-up rate of Wheatstone, the start-up of Ichthys and Prelude and in particular the commencement of decline from the North West Shelf,” the consultancy said in its latest report.

“We have the NWS commencing decline in 2019, accelerating in 2020.

“If that occurs Australia would get close to 77mt in 2020, but not overtake Qatar.”

Energy Quest also said that east coast diversions to the domestic market and LNG imports would also reduce Australia’s net exports.

“Potential east coast LNG projects are actively canvassing LNG suppliers, including Qatar,” the report said.

“It will be embarrassing if the world’s second largest LNG producer has to import LNG from the world’s largest producer.”

Total Australian LNG shipments were higher in March at 5.4mt, compared to 5.1mt in February, while the consultancy estimated that export revenue increase to a record $3.1 billion, with Western Australia accounting for nearly two thirds of that with $2 billion.

West coast shipments were up four cargoes in March to 56, with an increase from Woodside Petroleum's NWS to 23.

Production at the NWS was 17.8 Mt on an annualised basis, which is above nameplate capacity.

Gorgon shipped 17 cargoes in March, while Chevron's Wheatsone and Woodside's Pluto shipments remained steady at five and six cargoes respectively.

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