Oil and Gas News

NWS, Gorgon responsible for drop in LNG shipments

Australian liquefied natural gas (LNG) shipments were lower in September compared with the previous period due to decreased production at the North West Shelf (NWS) and Gorgon projects in Western Australia.

According to EnergyQuest’s Australian LNG monthly report, 6.2 million tonnes (Mt) were shipped from Australian projects in September compared with 6.6Mt in August.

Since the start of COVID-19 six months ago, shipments are down 3.8 per cent against the same period last year.

Overall, the main changes compared with August were five less cargoes from NWS and two less cargoes from Gorgon.

“The pandemic and flat LNG market has clearly had some impact on LNG exports. While total Chinese LNG demand has grown, demand from Japan and Korea is down, leading to extended maintenance at some LNG projects,” EnergyQuest stated.

“In a total context though a decline of 3.8 per cent is modest given the impact of COVID-19 on importing countries and the complexities of LNG production and shipping during a pandemic.”

Due to good production performance in the first quarter, LNG export volumes are running in line with 2019, exporting 57.7 Mt in the nine months to September.

EnergyQuest is confident that Australia will strengthen its position as the world’s largest LNG exporter in 2020, with Qatar’s LNG imports being down by 2.69Mt against the period in 2019, compared with Australia’s exports, which dropped by 0.74Mt.

In addition, the report highlighted that Gladstone LNG producers had a production surplus in September, with total production from LNG producers hitting 6.6 petajoules (PJ) more than total LNG exports.

However, this was lower compared with August when producers had a 8 PJ surplus, but LNG producers had a surplus of only 3.9 PJ in 2019.

Despite EnergyQuest estimating 101 cargoes to be delivered from Australian project in September, of the 91 cargoes exported during the month, Australian projects delivered 35 cargoes to China, 39 to Japan and 10 to Korea.