Australia will likely export more liquefied natural gas in the next financial year-to end-June 2019-after the start of production of three more large-scale facilities offshore during the second half of 2018, the Resources and Energy Quarterly report by the Australian Department of Industry said.
Following the launch of production at Chevron's and Woodside's Wheatstone LNG project and Inpex' Ichthys, the Department of Industry expects the country's total LNG exports next fiscal year to reach 74.9 million tons. In the next financial year, to end-June 2020, the department sees a further increase, to 78.3 million tons.
The FY 2018/2019 forecast, however, assumes Shell's Prelude project will begin production before this year's end, as scheduled. However, Shell has not yet announced the launch of commercial production at Prelude.
Wheatstone added 8.9 million tons of LNG to Australia's total liquefaction capacity when it began producing, with Ichthys adding another 8.9 million tons. When it begins production, Prelude will boost this by another 3.6 million tons of LNG annually.
However, although export volumes will grow, this may not be the case for earnings from them, according to the Department of Industry.
"Bulk commodity prices are expected to decline modestly over the outlook period," the the Resources and Energy Quarterly report said, "as global supply of these commodities improves. These price declines will more than offset the impact of growth in export volumes during that period, leading to a modest decline in export earnings in 2019-20. Export earnings should still be well above 2017-18 levels however, reflecting the tightness of resource and energy commodity markets and the benefits of rising Australian commodity production."
Australia in November became the world's top LNG exporter, surpassing Qatar with an export rate of 6.5 million tons, according to Reuters data. This compares to 6.2 million tons for Qatar.
By Irina Slav for Oilprice.com
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