Queensland LNG plants make record 3Q shipments

The three LNG plants at Australia's Queensland port of Gladstone shipped record volumes in July-September because of higher spot LNG prices and firm demand during a typical shoulder period for the plants ahead of the northern hemisphere winter.

Demand for Queensland LNG is usually lower during the northern hemisphere summer but July-September demand was the highest for the quarter on record and the fourth highest for any quarter since Queensland starting shipping LNG in 2014, the Australian Energy Market Operator (Aemo) said in its third-quarter Quarterly Energy Dynamics (QED) report.

Year-to-date demand for LNG from the three plants, which have a combined nameplate capacity of 25.3mn t/yr, has totalled 1,038PJ (27.72bn m³), marking the first time demand has exceeded 1,000PJ in the first nine months of the calendar year and tracking 62PJ higher than the previous record in 2019, Aemo said.

The 7.8mn t/yr Gladstone LNG (GLNG) venture, operated by Australian independent Santos, recorded the largest increase in demand of 27.7PJ in the latest quarter compared with the same period a year earlier, the QED report said. The Shell-operated 8.5mn t/yr Queensland Curtis LNG (QCLNG) posted an increase of 2.4PJ in July-September from a year earlier, while the 9mn t/yr Australia Pacific LNG (APLNG) saw an increase of 2.1PJ over the same period.

There were 87 LNG cargoes exported in the July-September quarter, up from 78 in the same period in 2020, Aemo said. The number of GLNG cargoes exported increased from 21 to 29 over the same period, QCLNG cargoes increased from 28 to 29, while APLNG cargoes remained steady at 29, the Aemo report said.

The higher APLNG output was achieved despite a planned single-train outage from 28 July to 24 August.

Queensland LNG exports were influenced by strong Asian LNG demand and record-high international gas prices, with benchmark LNG prices ending the July-September quarter at a record A$41/GJ ($31/GJ), up from A$17/GJ at the end of the April-June quarter, the QED report said.

Regional LNG prices were driven higher by ongoing refilling of gas storages, which were at multi-year lows in Europe and Asia, ahead of the northern hemisphere winter, coupled with adverse weather and maintenance supply disruptions, Aemo said.

Higher Queensland LNG output was a key contributor to the rise in eastern Australia gas production by 7pc or 21.4PJ compared with the same period in 2020, Aemo said. Another factor behind the rise in eastern Australia gas output was an increase in production at the Longford gas plant in Victoria, which processes gas for the Gippsland basin joint venture between ExxonMobil and Australian-UK resources firm BHP.

Longford's capacity factor was 96pc for July-September despite an early-July outage, the highest since 98pc in July-September 2017, Aemo said.

Higher gas feedstock consumption at the three Queensland LNG plants prompted a flow of 3.7PJ of gas from the Moomba gas plant, which is operated by Australian independent Santos, towards Queensland in September, Aemo said. "While this is usual during the shoulder season and summer months, it is the earliest gas has flowed north back to Queensland since Queensland LNG exports began [in 2014]," Aemo said.

By Kevin Morrison