Australia's Battle With Qatar for LNG Crown Stretching to 2020

(Bloomberg) -- Australia will likely overtake Qatar as the world’s largest LNG exporter in 2020, according to an Australian government report, one year later than it had previously forecast.

“The narrow difference between the projected exports of the two nations means that Australia overtaking Qatar is far from certain, especially in 2019,” the Department of Industry, Innovation and Science said in its report released Monday.

The two nations, along with the U.S., will be the top producers next decade of LNG, the fastest growing fossil fuel that’s finding users across developing economies and Asia, particularly China.

Australia’s LNG exports are expected to rise to 81 million metric tons in 2020, while Qatar’s hold steady at around 76 million, close to levels forecast for this year for the Persian Gulf state, according to the report.

Even if Australia does take the top spot, it’s not expected to hold it for long. New projects in the U.S. and expansions in Qatar mean Australia will likely be surpassed again by both nations in the middle of next decade, it said.

Other LNG highlights from the report:

  • Australia’s LNG export earnings are seen peaking at A$52 billion ($35 billion) in 2019-20 as the recent wave of new projects, including Royal Dutch Shell Plc’s Prelude and Inpex Corp.’s Ichthys, ramp up to full production, before easing to A$49 billion in 2020-21.
  • Spot LNG prices over the forecast period are expected to recover modestly from current lows. Prices are seen averaging $5.40 per million British thermal unit in 2019 and $6.30 in 2020.
  • The pace of the price recovery is expected to accelerate from 2021 as Australia, Russia and U.S. capacity additions are completed, while growing demand begins to narrow the global surplus.

©2019 Bloomberg L.P.

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