The Labour Party commits to…
Oil prices are on track…
Shell has finally sent the first shipment of liquefied natural gas from its Prelude floating production facility off the coast of Australia. S&P Global Platts reports that the cargo is bound for Asia, although the name of the buyer was not disclosed.
Prelude has been a highly anticipated addition to the world’s LNG export capacity amid strong demand and despite a glut that has had some in the industry and analysts worried that future capacity would be insufficient. With an annual capacity of 3.6 million tons of LNG, the project is an important addition to Australia’s claim to fame as the world’s future number-one LNG exporter.
"The first [LNG] cargo was more than eight years after FID and nearly two years after the facility arrived in Australia. How fast Prelude delivers its second and third cargo, and ramps up to plateau output, will be a key indicator of success," a Wood Mackenzie analyst told S&P Global Platts. Daniel Toleman added that "With Prelude on stream, Australia is on track to export more than 80 million mt/year of LNG, which surpasses Qatar as the largest LNG producer in the world."
Related: Papua New Guinea Looks To Double LNG Production
The Prelude is the last of the large-scale LNG projects to launch in Australia in the last few years. Last year two other ones began production: Inpex’ Ichthys and Chevron’s Wheatstone. As a result, the country’s Department of Industry forecast LNG exports to reach 74.9 million tons in fiscal 2018/2019 to the end of this month. For the next fiscal year, the department has projected LNG exports of 78.3 million tons, counting Prelude.
In its latest LNG Outlook, Shell forecast LNG demand to rise by 27 million tons this year, to 319 million tons, and further to 384 million tons in 2020. Over the medium to long term, the supermajor even warned of the possibility of a shortage unless a sufficient amount of new production capacity comes on stream. That’s despite challenges around LNG export projects currently under development, such as a shortage of willingness for long-term commitments on the part of buyers and investors.
By Irina Slav for Oilprice.com
More Top Reads From Oilprice.com:
Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.