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    Australia's LNG Export Value to Jump 41% in 2016-2017

Summary

Australia’s LNG output in fiscal 2016-2017 (July-June) is forecast to continue to increase in line with growth in export capacity, supported by additional supply from the Gorgon project and stronger coal seam gas production on the east coast.

by: Shardul Sharma

Posted in:

Natural Gas & LNG News, Asia/Oceania, Liquified Natural Gas (LNG), Australia

Australia's LNG Export Value to Jump 41% in 2016-2017

Australia’s LNG output in fiscal 2016-2017 (July-June) is forecast to continue to rise in line with growth in export capacity, supported by additional supply from the Gorgon project and stronger coal seam gas production on the east coast, country’s Department of Industry, Innovation and Science said in its report titled Resources and Energy Quarterly September 2016.

Australia's LNG output in 2016-17 is expected to be 104.4bn m³ compared with 81.65bn m³ in the previous fiscal.

The value of Australia’s LNG exports is forecast to increase by 41% to A$23bn (US$17.4bn) in 2016-17, supported by higher LNG prices and export volumes. LNG contract prices, under which most Australian LNG is sold, are forecast to increase in line with oil prices, the report said. Higher export volumes will be driven by the addition of around 15mn mt of LNG export capacity, bringing total operational capacity to around 66mn mt by mid-2017.

World trade

After several years of flat or declining LNG trade, growth in world trade is expected to increase by 7% in 2016 and 10% in 2017 to reach 285mn mt. According to the report, growth will be driven by demand in emerging Asia and Europe and supported by a major expansion of LNG export infrastructure in Australia and the US.

Japan’s LNG imports are forecast to fall by 3.2% to 80mn mt in 2017. Most of Japan’s LNG imports are used in electricity generation, where they will continue to face competition from renewables, coal and the restart of some nuclear capacity, the report stated.

South Korea and Taiwan’s LNG imports also declined over the first six months of 2016, falling by 2.5% and 2.2% year-on-year respectively. “Prospects for growth in overall LNG imports of both countries remain limited over the short term. In South Korea, LNG will increasingly compete with other energy sources, with 10 coal-fired power plants and 2 nuclear reactors scheduled for completion in 2016 and 2017—a total 13 GW of capacity.”

After contracting in 2015, China’s LNG imports rebounded over the first 6 months of 2016, increasing 13% year-on-year. Imports are forecast to increase by 21% to 32mn mt in 2017. “While China will also draw on both domestic reserves and pipeline imports to meet future gas demand, the commencement of long-term LNG contracts will support increased LNG imports,” the report said.

Imports of LNG by emerging Asian economies are expected to rise by 42% to 31mn mt in 2017.

 

Shardul Sharma