Australia's LNG exports are set to decline in 2024, as an increasingly complex regulatory environment frustrates producers' plans to offset field declines by backfilling projects.
Shipments from the world's third largest seaborne gas exporter are set to fall to 81mn t in the year to 30 June 2024 and further to 79mn t in the 2024-25 fiscal year, compared with 82mn t in 2022-23, according to Australia's Office of the Chief Economist.
Australian independent Woodside Energy is likely to take one 2.5mn t/yr train of its five-train, 16.9mn t/yr North West Shelf LNG off line in 2024, while fellow domestic operator Santos' 3.7mn t/yr Darwin LNG will sit idle as it prepares for backfill from the $3.6bn Barossa field, scheduled for first gas in 2025.
But the firms, Australia's largest listed gas exporters, face headwinds as they grapple with an environmental movement aiming to curtail Australia's fossil fuel exports.
Litigation by climate activists has delayed Barossa and the $12bn Scarborough field, Woodside's Carnarvon basin project to fill a second 5mn t/yr train at Pluto LNG.
Barossa's field drilling and laying of most of the gas export pipeline (GEP) have been paused all year, following a federal court ruling that Santos must hold consultations with native title holders regarding underwater cultural heritage.
A challenge to the Barossa GEP environmental plan (EP) is likely to lead to a delay in Barossa's completion, with Santos previously advising that first gas during the first half of 2025 was contingent on completing the laying of the GEP in 2023 and commencing drilling activities. It now appears neither can proceed before January 2024.
But Woodside received fresh approvals for seismic testing at Scarborough on 1 December.
Both firms have appealed for legislation to clarify EP requirements. But "times have changed" and industry must improve consultation and engagement, federal Labor resources minister Madeleine King has said. This is despite the government promising a review of offshore regulations. King's office has not detailed a timeline for the conduct of the review.
In a year marked by significant policy interventions in the energy market, Canberra also announced changes to taxes on gas export profits which are yet to pass parliament, with both the centre-right opposition Coalition and left-wing Green Party calling for compromises to pass the bill in 2024.
Australia's three east coast LNG projects will likely see supplies of onshore coal-bed methane rise after three consecutive La Nina years caused wet weather disruptions, with a 9pc forecasted rise in January-March exports.
Upstream production at Santos' 7.8mn t/yr Gladstone LNG reached a record 692 TJ/d in January-June 2023, while the upstream operator of the 9mn t/yr Australia Pacific LNG recently said output would be at the upper end of the 680-710PJ estimate for the year to 30 June 2024.
But with southern Australia increasingly reliant on Queensland gas owing to field depletion in Victoria's Bass Strait, the federal government could seek further domestic supply under its Domestic Gas Security Mechanism, despite recently securing 300PJ of extra gas until 2030
The Northern Territory (NT) government's approval of hydraulic fracturing in May has led to the commissioning of an engineering study for the proposed 6.6mn t/yr NTLNG plant — likely to be completed in the first half of 2024.
Fellow NT independent Empire Energy is aiming for a final investment decision on its 25 TJ/d Carpentaria pilot project early next year. But construction remains contingent on establishment of commercial flow rates from the untapped Beetaloo gas basin.
Elsewhere in the region, the 5.6mn t/yr Papua LNG in Papua New Guinea (PNG) is likely to reach final investment decision in early 2024 ahead of an early 2028 production start, while the 6.9mn t/yr ExxonMobil-operated PNG LNG facility expects to receive first gas from the Angore field in 2024.
