In its June report, EnergyQuest said lower oil prices are starting to feed into Australian LNG with extended maintenance, cargo deferrals, lower prices and asset write-downs.
Last month, Australian LNG shipments were down eight cargoes compared to May – from 6.4 million tonnes to 5.9 million tonnes – which EnergyQuest said is primarily due to scheduled maintenance at Gorgon.
Additionally, many cargoes have had their delivery delayed; EnergyQuest estimates 33 Australian cargoes loaded during June have anchored offshore or are steaming in circles prior to their destination, while an additional 20 cargoes shipped in May have also been delayed.
LNG cargo deliveries to major north Asian markets are also lower compared to this time last year, as the average Australian LNG price in China fell from US$9.01 (AU$12.91)/MMBtu in May 2019 to US$7.46 (AU$10.69)/MMBtu in May 2020.
Due to these lower prices, major LNG players Woodside and Shell have announced significant impairments in relation to their Australian LNG assets.
Woodside has written-down the carrying value of its interests in Pluto, NWS Gas, Wheatstone, Sunrise and Kitimat, amounting to US$4.12 billion (AU$5.9 billion), while Shell has written down the value of QGC and Prelude to US$8-9 billion (AU$11.5-12.9 billion).
Despite setbacks brought on by COVID-19, EnergyQuest reports Gladstone LNG producers had a production surplus in June, with total production from LNG producers being 8.6 PJ more than total LNG exports.
For more information visit the EnergyQuest website.
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