Australian gas exporters have managed to cash into the sustained spike in international LNG prices, with one shipping two cargoes from Queensland that could have been worth more than $180 million each.
The spot shipments of LNG were reportedly sold in November at close to the North East Asian spot price, consultancy EnergyQuest said in a quarterly report released on Monday.
International prices for gas have held near record levels for this time of year after soaring during the Northern Hemisphere winter, when at one stage a single spot cargo ship of LNG was theoretically worth more than $US205 million ($292.8 million). That compared with less than $US7.3 million in June 2020.
However the top prices were received by just one or two, and September quarter production reports showed more modest increases in average prices for Australian exporters such as Woodside Petroleum, Santos and Origin Energy. Woodside and Santos still raked in almost $3.6 billion in sales in the quarter, up 80 per cent from a year earlier.
While domestic east coast prices remain well below international rates, they jumped by almost 29 per cent in the September quarter, with spot prices increasing in November to $10-$13 a gigajoule, EnergyQuest said.
“Domestic spot prices remain well below international spot prices, which are around $40/GJ, but high international spot prices are certainly encouraging strong exports from Gladstone, including high-priced spot cargoes,” the Adelaide-based firm said.
Australia’s exports of LNG reached a quarterly record in the July-September period, hitting 21.1 million tonnes, EnergyQuest said, noting the strong performance continued into October when a record 7.23 million tonnes was shipped in 105 cargoes. October’s shipments were 85.1 million tonnes on an annualised basis, which beat the record annualised rate in March 2021 of 84.8 million tonnes.
Queensland’s LNG industry increased shipments in the September quarter to 5.9 million tonnes and EnergyQuest said the quarterly record for east coast shipments of 6.2 million tonnes set in the December quarter last year could tumble before the end of the year. The fourth quarter started strongly for the three Gladstone-based exporters, with 2.12 million tonnes shipped in October, with the plants averaging 96 per cent of total installed production capacity.
The high rate of exports from Queensland and rising prices have exacerbated worries among east coast gas buyers that domestic prices are set to follow overseas prices even higher, making the fuel unaffordable for some manufacturers.
After disappointment that recent policy decisions have done little to address the immediate affordability of east coast gas, industrial buyers were again frustrated last week when a long overdue voluntary code of conduct was finalised by gas producers but did not include the assurances on prices that they were looking for.