SYDNEY: Gas exports from Australia’s east coast have surged to record high levels over the past six months, thanks to a “massive increase in Chinese liquid natural gas (LNG) consumption.”
Oil and gas analyst Ben Wilson, from RBC Capital Markets told Xinhua on Wednesday, that although the ramp up was anticipated, the “absolute magnitude” of increase has taken many by surprise.
“In the year to November, Chinese LNG imports are running at greater than 50 percent higher than the prior year,” he said.
With Australia’s largest plants operating at full capacity, the spot price is expected to hit 11 U.S. dollars per million British thermal units in February, up from 5 U.S. dollars per million British thermal units during mid 2017.
In the month of December, Gladstone Port recorded its highest ever LNG export statistics, with Santos, Shell and Origin Energy’s major operations in Queensland State, shipping 1.99 million tonnes of the commodity overseas.
The figure was a 17 percent increase on the previous month and eclipsed the former record of 1.75 million tonnes during December 2016.
Further south in the Bass Strait off Tasmania, BHP and ExxonMobil’s gas fields also been hit their highest ever production levels in 2017.
Wilson explained that during the last two months seasonal weather condition have helped bolster Australia’s exports.
“The big increase has been due to the need for winter heating,” he said.
“But more broadly, driving the year on year growth has been the Chinese government’s mandated switch away from coal fired power, in order to improve air quality.”
With Australia set to become the world’s largest LNG supplier in 2018, the soaring rate of gas exportation has been a major windfall for the nation.