Japanese Prime Minister Shinzo Abe has officially opened the Inpex group’s $40-billion Ichthys LNG project at a ceremony in Darwin, a symbolic milestone that also propels Australia to the top of the list of the world’s LNG exporters, according to Adelaide-based energy economics group EnergyQuest.
Graeme Bethune, EQ’s chief executive officer, said as the Ichthys project ramps up production in the coming months, Australia’s annualized LNG production rate is set to overtake that of Qatar’s nominal capacity of 77 million tonnes/year and thus make Australia the world’s biggest LNG exporter.
Writing in the consultancy’s Monthly LNG Report, Bethune said total Australian LNG shipments were 10.3% higher in October at 6.4 million tonnes than the September figure of 5.8 million tonnes.
The increase in export shipments was boosted by the first LNG cargo from Ichthys that left the Darwin plant in October followed closely by two further cargos that month (OGJ Online, Oct. 23, 2018). Another three cargos are expected to load this month to be sold into the spot market.
The overall October increase in Australian shipments reflected strong performance by LNG projects in Western Australia and came despite a slightly lower number of shipments from Queensland projects compared with September. The Queensland dip followed an agreement by the east coast producers to offer uncontracted gas to Australia’s domestic market in the event of any shortfall.
Looking at statistics for the receiving end of LNG shipments, Bethune said China’s imports are rising rapidly with imports in September up 26% vs. the same period in 2017. China has now passed Japan as the world’s largest importer of gas (LNG and international pipeline gas).
Australia is still the largest LNG supplier to China, supplying 43% of Chinese LNG imports in September.
Bethune added that the Chinese-US trade war, along with record high LNG shipping costs that disadvantage longer distance transport, has resulted in a slump in US LNG exports to China from 500,000 tonnes in January to only 100,000 tonnes in September.