Australia is poised to become the world’s largest producer of liquefied natural gas (LNG) next year and to retain that position until 2024 when Qatar will reclaim the top spot.
The land down under briefly reached the pinnacle in late last year while Qatari operations slowed for maintenance purposes, however after producing 6.5 million tonnes in December the Gulf state pushed Australia to second on the ladder once again.
Analysts from both Wood Mackenzie and Norwegian firm Rystad Energy expect Australia will recapture the gold medal from summer 2019 when Ichthys and Prelude have fully ramped up.
There are currently seven LNG production plants in Australia. By 2020, Australia will be operating ten LNG production plants and potentially exporting more than 80 million tonnes of LNG per year.
Australia’s time at the top could be short-lived with Qatar Petroleum revealing a plan for four additional LNG trains to supply 33 million tpa of LNG. When these expansion trains reach plateau rates during the mid-2020s, Qatar will regain the top LNG producer crown that it will lose next year to Australia.
Qatar, which also exports around 600,000 barrels per day of crude oil, said earlier this month it would leave the Organization of the Petroleum Exporting Countries (OPEC) to focus on gas.
With Australia recently finishing a $200 billion construction binge, much of the near-term capacity additions are backfill projects intended to maximise capacity utilisation at existing hubs. Most of the looming LNG capacity additions won’t require the construction of additional trains except for Scarborough at Woodside’s Pluto LNG project.
These additions, along with proposed onshore LNG projects in Papua New Guinea could inject another $40 billion into the pockets of service providers in the region over the next couple of years.
This mammoth investment has grown LNG export revenue by 67.8 per cent on 2017 to $43.3 billion, making LNG the country’s third largest export in 2018 after coal and iron ore according to energy advisory firm EnergyQuest Australia. This represents a 23 per cent increase in LNG exports, from 56.5 million tonnes in 2017 to 68.5 million tonnes in 2018 much of which was sent to near neighbours in Asia.
Australia supplied over 53 per cent of China’s LNG imports during the first five months of 2019, according to shipping data from Refinitiv, up from around 40 per cent in 2016 when a previous round of new Australian export projects started to ramp up.
With USA and China trade tensions showing no signs of abating and the latter increasing LNG tariffs on the former to 25 per cent, Australia’s importance in supplying in the Asian nation’s energy is expected to continue to rise.