Key facts
- Chevron Australia expects LNG prices to remain high for the next six months.
- Balaji Krishnamurthy, Managing Director of Chevron Australia, stated this in an interview on Monday.
- Australia's LNG is currently trading at a premium in Asia.
- Chevron's Gorgon project has a capacity of 15.6 million tons annually, and Wheatstone has a capacity of 8.9 million tons annually.
- Chevron's Australian LNG projects account for about 5% of global supply.
- The average price for October delivery into northeast Asia was $26.00 per MMBtu on Friday.
Chevron Australia anticipates that liquefied natural gas (LNG) prices will remain elevated in the short term, citing significant supply disruptions stemming from the Middle East. Balaji Krishnamurthy, Managing Director of Chevron Australia, expressed difficulty in seeing prices decrease within the next six months.
Krishnamurthy noted that Australia's LNG is currently commanding a premium in the Asian market due to its geographical proximity to demand centers. This assessment was made on the sidelines of the Gastech conference in Bangkok.
Chevron operates two major LNG facilities in Australia: Gorgon, with an annual capacity of 15.6 million tons, and Wheatstone, with an annual capacity of 8.9 million tons. Together, these projects contribute approximately 5% to the global LNG supply.
The spot price for LNG delivered to Northeast Asia in October saw a significant increase late last week, reaching its highest point since 2022. This surge is attributed to the renewed tensions in the Middle East, which have further impeded the recovery of LNG flows through the Strait of Hormuz. While some shipments have reportedly been rerouted by transferring cargoes to other vessels outside the Strait, this limited recovery is insufficient to meet the demand ahead of the winter heating season in Asia and Europe.
The ongoing competition between Asia and Europe for alternative LNG supplies, exacerbated by the conflict in the Middle East since late February, has driven up prices. The average price for October delivery into Northeast Asia reached $26.00 per million British thermal units (MMBtu) on Friday, a slight increase from $25.70 per MMBtu the previous week. This Friday price marked the highest spot LNG price in Asia since December 2022.