Australia makes slight cuts to LPG output forecasts

Australian LPG production is likely to fall slightly short of previous expectations in the 2019-20 fiscal year that ends today because of maintenance at the 3.6mn t/yr Prelude LNG project.

Australian LPG field production is expected to rise to 97,000 b/d (3mn t) in 2019-20 from 66,000 b/d in 2018-19, which is just below the previous forecast of 99,000 b/d, the Australian government's commodity forecaster the Office of the Chief Economist (OCE) said.

The Prelude floating LNG (FLNG) project offshore Western Australia has been off line for maintenance since February, cutting output.

The OCE has also reduced its LPG production forecasts for 2020-21 slightly, to 100,000 b/d from the previous forecast of 101,000 b/d. The 2021-22 forecast is unchanged at 101,000 b/d, the OCE said in its June 2020 Resource and Energy Quarterly report.

The deferral of final investment decisions for several gas projects may affect condensate and LPG production beyond the outlook period of 2021-22, the OCE said.

The rise in LPG output in 2019-20 from a year earlier is largely the result of the start-up of the Prelude FLNG venture and the 8.9mn t/yr Ichthys LNG project, also offshore Western Australia. Prelude, which started shipments in 2019, has the capacity to produce 400,000 t/yr of LPG.

Ichthys, which is operated by Japanese upstream firm Inpex and started shipments in 2018, has nameplate LPG capacity of 1.6mn t/yr.

Australia's upstream LPG production averaged 8,800 t/d in April, more than double 3,700 t/d a year earlier and above the average of 8,300 t/d in March. LPG field production averaged 8,600 t/d over July 2019 to April, the first 10 months of the 2019-20 financial year.

By Kevin Morrison