EnergyQuest Australia has released its December Australian LNG Monthly report, including a detailed analysis of the sector’s performance across 2022.
EnergyQuest estimates that Australia exported a new record of 81.4Mt of LNG in 2022, up 0.5 per cent from 81.1Mt in 2021. Export revenue from LNG was over $90 billion.
In 2022 Australia is again likely to have ranked as the world’s largest LNG exporter, but on par with other major global producers, Qatar and the US, who were tied in 2022 with total exports of 81.2Mt. Australia’s ten LNG projects have a total production capacity of 88.6 million tonnes per annum (Mtpa), currently the world’s largest.
The report also focuses on the impact of Australian and global price caps which have been introduced for LNG prices.
The Federal Government introduced its $12/GJ price cap for LNG on December 22, and it came into effect the following day. In Europe, the EU has announced a price cap of $78/GJ, which will come into effect in February if certain conditions are met.
According to EnergyQuest Chief Executive Officer Graeme Bethune, the Federal Government and the ACCC must believe that Australian industry will be unable to compete against these high European energy prices.
Other news highlighted in the report is the extent to which spot gas prices are falling internationally and on the east coast of Australia. European spot prices are now down 80 per cent from their 2022 highs, due to warmer-than-expected weather, demand destruction and LNG imports.
High European gas prices in 2022 had pulled up Asian spot prices in 2022. However, falling European prices now, together with warm weather and reduced demand in Asia (exacerbated by the Chinese lockdown), are now pulling down Asian spot prices too.
The report notes that in Australia, east coast spot prices are down too. In December east coast spot prices were down by 15-28 per cent compared with November. According to EnergyQuest, the downturn in prices can be linked to international markets, as well as local factors, such as reduced demand for gas in power generation.
