Australia’s oil and gas industry has continued to drive the nation’s export earnings on the back off rising liquefied natural gas (LNG) volumes.
The latest Resources and Energy Quarterly publication from the Office of the Chief Economist forecasted LNG exports will continue to drive the nation’s exports earnings, which are tipped to reach a record $282 billion next year.
Australia exported $50 billion of LNG in 2018-2019 with export earnings forecast to lift to $52 billion next year driven by growing export volumes, before falling back to $49 billion as prices ease.
Export volumes are also expected to increase from $75 million tonnes in 2018-2019 to 81 million tonnes in 2020-2021 as the last two projects in Australia’s recent wave of LNG investment ramp up output.
LNG export prices are, however, expected to decline slightly in the next two years due to an appreciating exchange rate and easing oil-linked contract prices.
The forecast for oil market in contrast, remains uncertain, reflecting the world economy and geopolitical risks in oil producing regions.
This is expressed through oil prices reaching their lowest levels since early January following an attack on Saudi Arabia’s oil production facilities which shocked markets, adding a risk premium to prices on fears that Saudi oil infrastructure is vulnerable to major disruption.
Australia’s condensate and liquified petroleum gas (LPG) export volumes are rising and forecast to peak during the next two years, while crude oil production in 2018-2019 reached its lowest level in generations.
Earnings from crude, condensate and LPG exports are forecast to continue their upward trend, rising from $10.1 billion in 2018-2019 to $13.7 billion in 2019-2020.
Minister for Resources Matt Canavan said the results highlighted the importance of the oil and gas industry’s contribution to the economy.
“Record earnings are underpinned by rising export volumes of iron ore and LNG, and strong prices for iron ore and gold,” he said.
“Oil and gas extraction has been the largest contributor to mining industry value-added growth in the last few years, propelled by our rapidly growing LNG exports.”