Ichthys and Prelude FLNG turning Australia into globe's top LNG exporter
A new report by Adelaide-based consultancy EnergyQuest predicts that by 2020, Australia will become the globe's top exporter of liquefied natural gas (LNG).
The use of natural gas has been rising every year since the economic crisis of 2009, and today more than 3,700 billion cubic metres (bcm) of natural gas is produced globally every year. To transport all this gas, the substance is cooled to -160 degrees Celsius, the temperature at which natural gas becomes a liquid. In its liquid form, the volume of the gas is 600 times smaller, making it much more efficient, safe and cost effective to transport, mostly done through specifically designed LNG ships.
Currently, Australia is the globe’s second largest exporter of liquefied natural gas. In the latest financial year, which ran from 1 July 2018 to 30 June 2019, Australia exported a 75.1 million tonnes of liquefied natural gas, up 21% from the 61.7 million tonnes realised the year previous. In terms of revenue, export value of liquefied natural gas totaled $50.5 billion, making it the country’s third largest export by value after iron ore and coal.
With an export volume of 77 million tonnes, Qatar was the year’s top exporter, however, according to EnergyQuest’s scenario planning, Australia will displace the Middle East country by the 2020 financial year, when Australia’s production will have hit 80 million tonnes. The jump in capacity will be the result of the addition of two new major production facilities: the Ichthys gas field, located 220 kilometre offshore Western Australia, and the Prelude FLNG, the world's largest floating liquefied natural gas platform co-owned by Shell, Kogas and Inpex.
This capacity addition comes on top of previously launched giant gas developments Wheatstone, Gorgon, and Prelude.
The majority of Australia’s liquefied natural gas production stems from sites in Western Australia and the Northern Territory, most notably the Ichthys project and the Wheatstone project, owned by American oil giant Chevron. With a LNG production of nearly 22 million tonnes, Queensland accounts for around 30% of total capacity.
Asia Pacific countries of Japan, China and South Korea are the largest importers of Australian LNG, mainly due to their proximity. More than 40% of all exported volume is shipped to Japan, with China in second position, accounting for 37% of exports. South Korea is the third largest market with a 10% stake in exports.
Established in 2005, by chief executive Graeme Bethune, consulting firm EnergyQuest provides commercial analysis on and insights into Australia’s oil and gas sector. The firm works with energy companies, energy buyers, governments and investors.
