On December 11, 2018, this junior LNG player, LIQUEFIED NATURAL GAS LIMITED (ASX: LNG) moved up about 3.2% on ASX after a period of lull; and what seems to made it move up is an interesting revelation. As per the November data from Reuter’s risk & financial expert, Refinitiv Eikon, Australia grabbed the title of the world’s largest LNG exporter, first time ahead of the global leader Qatar. Australia managed 6.5 million tonnes of LNG exports, up by 15 %, while Qatar’s exports of over 6.2 million tonnes (the drop of 3%) for November as compared to the previous month were noted.
As suggested by many experts, this crucial shift in position is attributable to numerous export projects undertaken by Australia over the past three years. The most significant of all has been the recent LNG Ichthys project, operated by Japanese giant INPEX, off the nation’s coast. The world’s largest oil and gas project, with the commencement of its deliveries, represents the most significant discovery of hydrocarbon liquids in Australia in past decades.
The observed dip in Qatar’s gas exports is reflected in lesser import demand by the UK, Qatar’s major trading partner. UK has been meeting most of its LNG demand from global new start-ups over the past few months. There has also been a reduction in Qatar’s gas production and supply, due to its ongoing railway maintenance.
Many believe that Australia will further strengthen its global leadership with a new project Royal Dutch Shell. The project is in the pipeline and due for hitting production by 2019. During 2019 and 2020, Shell aims at successful drilling of 250 new gas pits in the region of Queensland. The project is expected to further boost Australia’s LNG exports by bringing more gas to market.
However, rising LNG exports had a cascading impact on the Australian economy by pushing up the domestic gas prices, a major political issue in the nation currently.
Others are of the opinion that Australia's hold on the top spot could be short-lived and temporary. Its global counterpart Qatar will strive harder to regain its leader status. A series of new projects are expected to be launched. Qatar plans to upgrade its LNG capacity to annual production of 110 million tonnes in next 6 years, up from its current production of 77 million tonnes a year. It aims at adding a fourth LNG production line and expanding its production capacity.
Despite the positive announcement for Australia’s energy sector, the local benchmark Index S&P/ASX 200 Energy Sector (XEJ) closed at $9942.0034, down by 0.32%. However, certain specific oil and gas stocks performed quite well today.
At the close of trading hours, shares of Cooper Energy (ASX: COE) closed at $0.420, up by 3.704%. Not just blue chips but even junior players such as Baraka Energy & Resources (ASX: BKP) enjoyed a rally in the equity market, riding high on positive news from one part of the sector. The company’s shares experienced gains of 2.118% at the close of the market.
The aggressive competition between Qatar and Australia over securing top position as global oil and gas supplier, is worth close monitoring in near term.
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