Report tips oil and LNG export earnings growth

ENERGY commodity export earnings have been tipped to grow to $77 billion by the end of 2012, according to the March quarterly Resources and Energy report released by the Bureau of Resources and Energy Economics (BREE).
BREE stated that the increase was a result of strong growth in export earnings from energy sources including LNG (up 13 per cent to $12 billion) and oil (up 7 per cent to $12.6 billion). It reported that investment in LNG production facilities would drive a surge in LNG exports for the outlook period (2012 to 2017), with the commissioning of Woodside Energy’s Pluto project (which is currently processing its first gas from the Pluto field) expected to boost exports in 2012.
For the remainder of the outlook period (2013 to 2014 and 2016 to 2017), Australian LNG exports were projected to rise at an average rate of 31 per cent per year to reach 63 million tonnes, underpinned by the commissioning of several LNG projects under construction. The report stated that the new projects were expected to increase Australia’s total liquefaction capacity fourfold, to 85mt, by 2017. “The growth in Australia’s LNG industry over the next five years is underpinned
by over $175 billion worth of investment to expand capacity in Western Australia, Queensland and the Northern Territory,” BREE executive director and chief economist Professor Quentin Grafton said in a statement.
Professor Grafton said that the investment total included: the Pluto project, which will increase Australia’s aggregate LNG liquefaction capacity to 24mt in 2012; the Australia Pacifi c LNG, Queensland Curtis LNG and Gladstone LNG projects,
that have a combined capacity of 25 million tonnes per annum and are scheduled for start up between 2014 and 2015; and the completion of the Gorgon, Wheatstone, Prelude and Ichthys projects by 2017. BREE also reported that Asia-Pacific
imports of LNG were forecast to rise by 11 per cent in 2012 to reach 162mt, supported by stronger gas-fi red electricity generation and higher industrial and residential consumption in existing and emerging LNG importing economies.
Australia’s main LNG export customers are Japan, Korea, Chinese Taipei and China. BREE reported that imports into the Asia-Pacific region would be further supported by growing demand from Asian economies that did not import LNG prior to 2011, including Thailand, Malaysia, Singapore and Vietnam. BREE’s outlook for Australian crude oil and condensate production, on the other hand, predicted a 4 per cent decline to 23.7 gigalitres during the 2011 to 2012 period. “Lower production refl ects planned shut-ins on the North West Shelf that occurred in the September 2011 quarter and declines from maturing fields,” the report stated.
Diminishing production from maturing fields was also expected to offset new production from several small fi elds during 2013 to 2016, with production projected to fall at an average rate of 6 per cent per year. However, national crude oil and condensate production was expected to rebound 8 per cent from 2016 to 2017, to 19.1 gigalitres, as a result of the start up of the Prelude and Ichthys projects.


By Danica Newnham

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