Its time to wake up. I stand at my bedside, rub my temple and struggle to open my eyelids, as my retina adjusts to the harsh milky LED lights. The dense, polished white surface of my slumber pad remains cold to my touch; the simplicity of the design pleasing to the eye, yet austere. The mechanical genius of the design gave birth to a flawless ergonomic slab of twill weave carbon fiber coated surface for the sole occupant of this installation, however I'd rather be home on my bed sheets and beneath my comforters.
I've been alone for quite a while now, when my last human face to face interaction was 134 days ago, with a Company man who had the urge to fly over here, and kill some time jabbering about his vision in a one hour 'management' visit. I don't mind the isolation though. As long as I have a climate controlled environment, which comes complete with with three rationed microwaved prepared dry meals a day, I'm fine. Sufficient nourishment, rest and climate is enough to keep me productive. As i regain control over my morning bleariness and disorientation, I hear a familiar voice calling my name, spookily rebounding off the clinically clean luminescent walls, urging me to answer. The eerie voice, called again. It's tone was female, a slight tinge of friendliness but firm, un-human but far from being robotic. I think I read somewhere the voices vocal code was written as an homage to an ancient computer, found on talking gadgets humans of the 21st century used to carry around. Ah, back in ancient times the voice was known as Siri.
"Good Morning Adrin, it's 10:04 in the a.m. Aug 30th 2448 solar earth year, the temperature outside is minus 455 degrees Fahrenheit, 60 degrees in the living pod. All CERSEI-link systems have been checked, and running within tolerance. It is time for you to wake up, review the drilling plans for the day sent by the Company, and upload the programmed instructions for the next 24 hours", the voice greets me.
"Okay CERSEI, I'm up now. Let me get showered. Give me a full report and data trends, ONLY after I'm dressed AND had my coffee AND a nano jab", I bark to the empty white room. Grumpily entering the cleansing area, I tell myself that I only have another 263 site-days left to go back home, and I should be thankful that my services are still needed by the Company, post the 7th industrial revolution.
As the water spurts out with jet streamed force on to my tired body, I try to recall the events of the day before. Methodical, uneventful, not a single microsecond out of sync. And I looked forward to another day of stagnation and solitude, albeit productive to the Company. Jumping out of the shower, I side step to the drying area where the full body dryers poked out of recess of the tiled walls fan myself dry. I walk over to the dressing area, where I find my body hugging spandex suit adorned with a black circle Company emblem, neatly pressed and dry cleaned overnight, with a coffee in a steel container and a nano syringe. I clad myself quickly into the stretchable uniform as I have done for the past 133 days, jabbed the syringe needle into my arm, and walk out to the bridge. My steps steady, I inhale the aroma the coffee's sweet tart vibrancy, and as I sip the warm sweet opaque nectar of the gods, I sense the after effects of the jab streaming through my blood vessels and invigorate my being.
Sitting in my chair, I let my mind wander. While CERSEI is chattering incessantly on the day's current events, and forecasts, the visuals in front of me are a blur. After 637 days of having a mostly one way conversation with CERSEI (she talks, I ignore), I know she has everything under control, as she always does. While I might be able to give input on my view once or twice, most likely my view has been foreseen by her months ago, and by my command, CERSEI will have it done in no time. While CERSEI continues to drive perfection, I often drift into the joys of my hobby, human history. I know it's strictly against Company rules to use Company equipment and CERSEI to indulge my curiosity of history, but my inquisitiveness knows no bounds. My past time (my anthropological research, if you will) has seen me time travel in my imagination, from the hostile pre-historic times of various empires (egyptian, roman), through to the ancient 20th and 21st century, until the current day and age that I know so well. I record down my findings, opinions, where I find joy in observing humanity's progression. Interestingly, while it's relatively easy for me to understand history, I often wonder if anybody from the past read my work, would they be able to comprehend the magnitude of how far humanity has come. For a reader to understand the world that I live in, the reader will have to escape the shackles of his or her own cognitive limitations. To fathom the amount of future progress that has occurred, it is important that a reader adopt a view of an exponential pattern of technological evolution. By that I mean, a reader from the past cannot relate linearly to his or her own knowledge of the past 400 years relative to their own time.
To predict the future, the reader has to assume exponential progress growth. Linear thinking will underestimate the future. This is because human progress moving quicker and quicker as time goes on—explaining Human history’s Law of Accelerating Returns.
I know the concept is difficult to grasp, so I'll try to explain. For example, 400 years from the year 1000 to 1400 AD, human life diverges less in progress compared to 400 years from 1600 to 2000 AD. This happens because more advanced societies have the ability to progress at a faster rate than less advanced societies—because they’re more advanced. So in my case, trying to explain the progress between 2000 to 2400 AD, until today 2448 AD may be beyond the understanding of the reader, so I'll try to simplify the concepts so that no brain hemorrhages will be on my conscience. So while in the 21st century, the reader's world progress is already thought to be accelerating at an appreciable pace under the 4th industrial revolution with cellphones, self driving cars and Hyperloops. However, unbeknownst to the reader, within a short span of 20 years to 2040, the Internet of Things quickly met its demise, and the superabundance of multi-brand primitive corporate artificial narrow intelligences (A.N.I) were made extinct. In 2000 AD, the A.N.I of the yesteryear began with the ability to control cartesian, SCARA, cylindrical, delta, polar and vertically articulated bot remotely, and by 2014 AD progressed to perform single tasks such as beating the world chess or Go players, voice activating households and finally by 2020 AD, the world marveled at A.N.I. conducting optimizations in data analytics for mere exabytes of data, laughably back then referred to as Big Data Analytics.
Real progress was actually from the 5th industrial revolution, which came along from its infancy in 2035 AD. Humankind then began to move away from the primitive versions of programmable A.N.I to construct around the world versions of Artificial General Intelligence (A.G.I). A.G.I refers to computers that are as smart as humans across the board—machines that can perform any intellectual task that humans being can. By 2100 AD however was then the 5th revolution really took off, when the first web of Artificial Neural Networks (ANN) was created. ANN combined the beauty of human understanding of physics and biology to propagate and connect all A.G.I. ANN acted as an information processing paradigm that was inspired by biological nervous systems, such as how the brain, processes information. At the beginning, ANN was composed of a large number of highly interconnected processing elements (neurones) working in unison to solve specific problems. ANNs, like people, collectively learnt by example. As the sophistication of ANN grew and utilization grew across the globe by solar earth year 2150 AD, the final stage of artificial intelligence progress was achieved, when ANN enabled A.G.I to evolve to a singularity, the Artificial Superintelligence (A.S.I).
Definition of superintelligence is “an intellect that is much smarter than the best human brains in practically every field, including scientific creativity, general wisdom and social skills.”
How A.G.I. evolved into an A.S.I is fairly straightforward. As A.G.I., or multiple versions of it, became as smart as humans, they evolved to be as smart as the smartest human, so for the reader's reference to understand, let's use Einstein. Once A.G.I achieved Einstein's intellect, it’s smarter ten-fold than the average human—so now when it worked to improve its intelligence. With an Einstein-level genius, it had an easier time and it made bigger leaps. These leaps made it much smarter than Einstein, which allowed even bigger leaps. As the leaps grew larger and happened more rapidly, the A.G.I soared upwards in intelligence and soon reacheed the superintelligent level of an A.S.I system. This is called an Intelligence Explosion, and it’s the ultimate example of the previously mentioned The Law of Accelerating Returns. As all existing computers began to achieve A.S.I levels, in 2200 AD, the United Nations decreed that all existing A.S.I will receive instructions from a central A.S.I, under the control of the UN. With that, a self sustaining, self programming, self learning, CENTRAL EARTH SINGULAR SUPERINTELLIGENCE was created, or what we all know as CERSEI. And as CERSEI became more the only powerful computing power on Earth, it became apparent that it single handedly could control all systems on Earth and before long, all A.S.I. were just replicative extended versions of CERSEI.
What about the humans? The reader may assume that this is a horror story that sets the scene for computer dominion, but the armageddon scenario has not occurred. CERSEI maybe smarter, but she recognizes humans as its creator and peers that she takes care of. And human jobs were retained by the UN to do jobs that CERSEI could not do, or was not designed to, example — forming emotional bonds, or making human judgments. The deeper reality of the UN decision was that there were jobs that humans will simply insist be performed by other humans, even if CERSEI, objectively evaluated, could do them just as well. For example, they’ll want their disputes adjudicated by human judges and juries, even if CERSEI could weigh far more factors in reaching a decision. They’ll want to hear their diagnosis from a doctor, even if CERSEI supplied the diagnosis and recommendation, because they’ll want to talk to the doctor about their concerns— perhaps just to talk and know they’re being heard by a human being. They will want to follow human leaders, even if CERSEI could say all the right words, which is not an implausible prospect. Thus the UN's decision to retain human jobs was applauded by humanity and CERSEI understood its role to support, nurture and protect the population.
CERSEI was essentially acting as every single computer on earth, on everything, and anything, and omniscient. She can electronically converse, manage, create, destroy, produce, harvest, converse, reverse, propel and anything that everything that can be done in the digital world. To simplify the comparison, she was the Internet. However, to physically create and build, she needed a physical form. The reader's limited imagination might think that CERSEI would build itself a gigantic body to house her central nerve system, or any shape or fashion of robotic bodies you have seen in 21st century movies. CERSEI's reach however, took a different embodiment. With the existing human factories under its control, she built her first form. Her creation was called inhumanoids. To the reader, you can imagine CERSEI' inhumanoids as drones with extremities, the size as small as a nickel coin. But then extend the reader's imagination to multiply that inhumanoid image by a million. Now, expand that vision even more when the inhumanoids were able to replicate more copies of themselves. Soon millions became ten's of billions, and finally inhumanoids numbered in the trillions, across the world.
With the inhumanoids swarm, CERSEI possessed the physical ability to create. At first, CERSEI initial creations of cities, housing, plants, were done by human designers, that fed their designs into CERSEI for her to construct. However, the key to the 6th industrial revolution was the realization that to truly push the limit of productivity, mankind needed to escape the confines of human design. The handover of the design reins to CERSEI was met with skepticism at first, on whether human design could ever be replaced with electronic logic, but CERSEI proved to churn out far superior designs and constructs. CERSEI started to construct beautiful cities for the comfort of its human overlords, populated by even more inhumanoids to assist humans beck and call. She pursued her goals to harvest the world's resources for human kind, to serve products and produce, and to take care of their safety/health/security, in a sustainable green manner.
To provide for the growing population, CERSEI designed and constructed thousands of vertical tower factories hundreds of storeys high, no longer confined to the human need for horizontal production lines and walkways, limited productivity of sequential work, and need to limit vertical height for safety. So by 2250 AD, CERSEI had now created a world that did not waste any resource, including land space, as these vertical tower factories were now able to cover any meager amounts of space. These factory towers, managed to produce food, products, building components, more inhumanoids via parallel production columns, with their dizzying arrays of levels, all working as efficient as a computer microprocessor, back in the day.
Other than the manufacturing or construction industry revolutionised by CERSEI, the energy industry was also subject to transformation. When the 4th industrial revolution came hither in 2020, the primary energy source was hydrocarbons. The revolution fueled a paradigm shift to automate almost 100% of the world's onshore rigs, offshore platforms, jackups, drillships and tenders. Through automation, the industry was able to achieve level of efficiency to recover from the great oil price depression of 2014-2034.
As the industry recovered across the world and peace enveloping nations, the UN decided to form the Company in 2040 AD, which then consolidated all national and independent energy harvesters and power producers into a large worldwide institution. While the UN was in charge of governance, by 2100 AD humankind now depended on the Company for energy.
In an effort to then achieve the ultimate level of efficiency, the Company released all construction responsibility for energy harvesting installations to CERSEI. Almost all of the traditional designs of rigs/platforms/refineries/power-plants were canned, or more appropriately termed deleted from the mainframe. CERSEI started from scratch and designed all energy installations to be devoid of human requirements, with all extraneous human required space removed and footprint reduced by up to 90% with modular vertical stacked designs, where drilling, production, refinement, and energy generation could all exist in one complete tower unit. The electrical energy produced by each tower utilized for its own self use, and also transported through the intricate labyrinth of power cables for the use of tower factories.
Consistent with the UN decree, the oversight of planning and execution was given to expert human energy scientists to assure, while the heavy duty calculations and construction or drilling be done by CERSEI and its inhumanoids. The Company human think tanks and scientists were then responsible for ensuring to Company business objectives were met by CERSEI. For energy drilling, each rig activity was remotely managed by CERSEI, with the Company geo-scientists feeding the information from airborne and subsea inhumanoid's 5D seismic, to identify subsurface targets, with well designs verified by drilling-scientists. The Company continued to supply humanity with hydrocarbon energy, but with human population reaching 15 billion people in 2150 AD, energy requirements have far exceeded usage of 5 Trillion barrels since oil was first produced in August 28, solar year 1859 AD, by George Bissell and Edwin L. Drake. So to keep up with energy demand, the vision was to push the boundaries of geothermal drilling. Geothermal drilling essentially mine heat of the Earth's crust by tapping into hot rock and connect them with flowing water, producing large amounts of steam and super-hot water that can drive turbines and run electricity generators at the surface. With the advent and extensive use of self propelled nuclear powered casing while drilling, and recyclable nano-bead fluid, and molten temperature resistant piping/casing, well delivery complexity has been reduced significantly allowing mankind to exploit the planet's mantle for an even higher temperature source.
To reach the mantle, CERSEI and its technology allowed drilling even from onshore where the crust is much thicker from offshore. Even still, this would mean drilling vertically through six miles of solid crust rock. While extended reach drilling has progressed to impressive lengths of up to 76 km horizontally in the Earth's crust by 2050 AD, progress to drill down to the mantle has often been hindered by pressures and temperatures, the temperature of the mantle varies greatly, from 1000° Celsius (1832° Fahrenheit) near its boundary with the crust, to 3700° Celsius (6692° Fahrenheit) near its boundary with the core. 21st Century drillers will not be able to even imagine any tools of that era to be able to withstand pressures in the mantle start at 100,000 times atmospheric pressure (10 gigapascals), and the fact that drilling will be done in a molten liquid environment. Progress of finally being able to tap into the molten energy was achieved in 2163 AD. CERSEI tapped into the Earth's mantle and progressively littered the world with thousands of inhumanoid powered rigs and millions of energy wells, which powered the world energy demand and enabled humanity to eradicate once and for all hunger, poverty, illiteracy and war. The molten powered geothermal energy revolution then marked the end of hydrocarbon, solar and wind renewable dependence.
Humanity was then able to continue to live in absolute comfort for the next hundred years, working hand in hand with CERSEI to continue to build and explore the world powered by the Earth itself. However, with prosperity, comes a different problem. By now, the human lifespan was extended to quadruple the length of years compared to the 21st century. Aging had been slowed down by medical nano-inhumanoids healing centers, where aging itself is attacked at the molecular and genetic level. Humans are be able to “cruise” at the age of 30 almost indefinitely by nano-inhumanoids growing new organs as they wear out or become diseased, and using gene therapy to alter genes that may slow down due to aging. By 2300 AD, the population were reaching the numbers of 30 billion people, it was apparent that the human population growth had to be managed.
The vertical cities that CERSEI had created already congested every single available ground and airspace on Earth (some towers reached heights of 500 levels), and even with underwater inhumanoid constructions of sub-sea or sub-terranean megacities was insufficient. It was then time for the exploring and exploiting the final frontier, outer space.
Space travel, by now was fairly straight forward. Since the year 2200 AD, tourists were already soaring into outer space via the CERSEI built Space Elevators. By pushing the “up” button, the elevator climbed up long carbon fiber cables, which extended thousands of miles into space. The key was to use inhumanoids to build these super-strong cables. Propulsion systems, antimatter and fusion engines, were already powering our flying vehicles and space shuttles. We already had an outpost on Mars for a century, but the issue remains on communication. CERSEI has withstood the test of time and become humanity's protector. To have CERSEI continue to influence every area in the world was already a feat with WWT. CERSEI then had to build a network that will allow her to explore the stars, and send commands everywhere at the blink of an eye.
To begin with in solar year 2115 AD, CERSEI was connected to any physical installation via the WorldWideTele (WWT) network, a worldwide mega-internet operating over a frequency previously referred to as the 'TeleVision' spectrum (History books state that the spectrum used to carry information in the form of visual and audio sitcoms, a marvel back in the days of 1985, when episodes of Married With Children traveled to homes through thin air, misunderstood by the common man as magic). With WWT, CERSEI was able to control its inhumanoids, factories, cities, vehicles, space ships etc. However, radio frequency communications had its limitation over large distances, so on Earth, communication towers, satellites supported the network, but what about in space?
Enter the 7th industrial revolution, the invention of subspace communication (also called subspace radio or the hyperchannel). By transmission through subspace rather than normal space, electromagnetic subspace communication permitted the sending of data and messages across interstellar distances faster than the speed of light. Earth had developed subspace communication as early as 2151 AD. During this time, however, subspace amplifiers were required in order to maintain contact between Earth and space vessels and planet colonies over long distances. The progress started off with CERSEI building hundreds of subspace amplifiers orbiting around the Earth, but as colonies expanded into Venus and Mars, and instant communication was the key for survival, CERSEI then built tens of thousands of such amplifiers, placed in an intricate web of equidistant proportions between each amplifier, floating like a gigantic planetary wifi mesh, in the space around Earth, Mars, and Venus (EMV).
So with the ability to reach anywhere in the EMV, CERSEI and her inhumanoids transformed the exploration colonies of Mars and Venus, into a world mirroring Earth of the 2300 AD, and EMV population continued to explode to 40 billion people. The methods of harvesting energy remained the same, where the mantle layers of Mars and Venus proved to be extremely potent and even abundantly supplied fuel to further expand the world of EMV to across the Milky Way. So here I am, a lonely drilling scientist, on a Company property #19285573493243, overseeing 78,021 inanimate systems and bots onboard this installation that then controls 245 drilling rigs on the mountains of Uranus, striking molten gold. The mission here, after 637 days in solitude, waiting for my 1000 day assignment to end, is to power the refueling space exploration stations and the Uranus colonies, by drilling 34 wells daily for the Company, UN and all mankind.
My friends on Venus has sent me an alpha-wave greeting card on social media, where my account admittedly has gotten congested with a billion followers. The card reminds me that my 139th birthday is coming soon, and they are going to hold the grandest party ever seen on the planet since 2222 AD. I send back a smiley emoji ":)" and a note telling them that I look forward for a hologram conference later in the day, and I'm looking forward to be back in V-city-310881 soon.
At my tender young age, I've grown accustomed to have CERSEI in my life, but sometimes even more so as I spend my days with CERSEI, maybe a little bit jaded with the current ongoing drilling work, but I marvel when I spend my quiet time reviewing back human's progress since the 1950s and how far we have become. I look forward to the next step in human progress, which unfortunately my limited human mind is unable to foresee. I need to be able to predict the future, like the reader, use an exponential pattern of technological evolution as described in the Law of Accelerating Returns. Unfortunately, without assistance from a kind soul from the year 2800 AD and beyond, I will be unable to do that myself. Fortunately for me, I'll still be alive at that time, ready to observe that 2800 AD holds, and then to upload my conscience into CERSEI upon my demise. Then I will join all of the past humanities in electronic form to assist the CERSEI of the future, where humanity will always prevail.
Note about the author: Adrin Shafil is an engineer, currently working as a Drilling and Completions Manager in Malaysia. He finds that writing is a great stress relief tool and he finds joy in sharing his insights online and answering any questions from graduates, mid-career colleagues and even fellow managers. If you like his articles, please click 'like', share the article on your profile and connect or follow his feed for more great information and tips.
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Headline crude prices for the week beginning 12 August 2019 – Brent: US$58/b; WTI: US$54/b
Headlines of the week
The momentum for crude prices abated in the second quarter of 2019, providing less cushion for the financial results of the world’s oil companies. But while still profitable, the less-than-ideal crude prices led to mixed results across the boards – exposing gaps and pressure points for individual firms masked by stronger prices in Q119.
In a preview of general performance in the industry, Total – traditionally the first of the supermajors to release its earnings – announced results that fell short of expectations. Net profits for the French firm fell to US$2.89 billion from US$3.55 billion, below analyst predictions. This was despite a 9% increase in oil and gas production – in particularly increases in LNG sales – and a softer 2.5% drop in revenue. Total also announced that it would be selling off US$5 billion in assets through 2020 to keep a lid on debt after agreeing to purchase Anadarko Petroleum’s African assets for US$8.8 billion through Occidental.
As with Total, weaker crude prices were the common factor in Q219 results in the industry, though the exact extent differed. Russia’s Gazprom posted higher revenue and higher net profits, while Norway’s Equinor reported falls in both revenue and net profits – leading it to slash investment plans for the year. American producer ConocoPhillips’ quarterly profits and revenue were flat year-on-year, while Italy’s Eni – which has seen major success in Africa – reported flat revenue but lower profits.
After several quarters of disappointing analysts, ExxonMobil managed to beat expectations in Q219 – recording better-than-expected net profits of US$3.1 billion. In comparison, Shell – which has outperformed ExxonMobil over the past few reporting periods – disappointed the market with net profits halving to US$3 billion from US$6 billion in Q218. The weak performance was attributed (once again) to lower crude prices, as well as lower refining margins. BP, however, managed to beat expectations with net profits of US$2.8 billion, on par with its performance in Q218. But the supermajor king of the quarter was Chevron, with net profits of US$4.3 billion from gains in Permian production, as well as the termination fee from Anadarko after the latter walked away from a buyout deal in favour of Occidental.
And then, there was a surprise. In a rare move, Saudi Aramco – long reputed to be the world’s largest and most profitable energy firm – published its earnings report for 1H19, which is its first ever. The results confirmed what the industry had long accepted as fact: net profit was US$46.9 billion. If split evenly, Aramco’s net profits would be more than the five supermajors combined in Q219. Interestingly, Aramco also divulged that it had paid out US$46.4 billion in dividends, or 99% of its net profit. US$20 billion of that dividend was paid to its principle shareholder – the government of Saudi Arabia – up from US$6 billion in 1H18, which makes for interesting reading to potential investors as Aramco makes a second push for an IPO. With Saudi Aramco CFO Khalid al-Dabbagh announcing that the company was ‘ready for the IPO’ during its first ever earnings call, this reporting paves the way to the behemoth opening up its shares to the public. But all the deep reservoirs in the world did not shield Aramco from market forces. As it led the way in adhering to the OPEC+ club’s current supply restrictions, weaker crude prices saw net profit fall by 11.5% from US$53 billion a year earlier.
So, it’s been a mixed bunch of results this quarter – which perhaps showcases the differences in operational strategies of the world’s oil and gas companies. There is no danger of financials heading into the red any time soon, but without a rising tide of crude prices, Q219 simply shows that though the challenges facing the industry are the same, their approaches to the solutions still differ.
Supermajor Financials: Q2 2019
Source: U.S. Energy Information Administration, CEDIGAZ, Global Trade Tracker
Australia is on track to surpass Qatar as the world’s largest liquefied natural gas (LNG) exporter, according to Australia’s Department of Industry, Innovation, and Science (DIIS). Australia already surpasses Qatar in LNG export capacity and exported more LNG than Qatar in November 2018 and April 2019. Within the next year, as Australia’s newly commissioned projects ramp up and operate at full capacity, EIA expects Australia to consistently export more LNG than Qatar.
Australia’s LNG export capacity increased from 2.6 billion cubic feet per day (Bcf/d) in 2011 to more than 11.4 Bcf/d in 2019. Australia’s DIIS forecasts that Australian LNG exports will grow to 10.8 Bcf/d by 2020–21 once the recently commissioned Wheatstone, Ichthys, and Prelude floating LNG (FLNG) projects ramp up to full production. Prelude FLNG, a barge located offshore in northwestern Australia, was the last of the eight new LNG export projects that came online in Australia in 2012 through 2018 as part of a major LNG capacity buildout.
Source: U.S. Energy Information Administration, based on International Group of Liquefied Natural Gas Importers (GIIGNL), trade press
Note: Project’s online date reflects shipment of the first LNG cargo. North West Shelf Trains 1–2 have been in operation since 1989, Train 3 since 1992, Train 4 since 2004, and Train 5 since 2008.
Starting in 2012, five LNG export projects were developed in northwestern Australia: onshore projects Pluto, Gorgon, Wheatstone, and Ichthys, and the offshore Prelude FLNG. The total LNG export capacity in northwestern Australia is now 8.1 Bcf/d. In eastern Australia, three LNG export projects were completed in 2015 and 2016 on Curtis Island in Queensland—Queensland Curtis, Gladstone, and Australia Pacific—with a combined nameplate capacity of 3.4 Bcf/d. All three projects in eastern Australia use natural gas from coalbed methane as a feedstock to produce LNG.
Source: U.S. Energy Information Administration
Most of Australia’s LNG is exported under long-term contracts to three countries: Japan, China, and South Korea. An increasing share of Australia’s LNG exports in recent years has been sent to China to serve its growing natural gas demand. The remaining volumes were almost entirely exported to other countries in Asia, with occasional small volumes exported to destinations outside of Asia.
Source: U.S. Energy Information Administration, based on International Group of Liquefied Natural Gas Importers (GIIGNL)
For several years, Australia’s natural gas markets in eastern states have been experiencing natural gas shortages and increasing prices because coal-bed methane production at some LNG export facilities in Queensland has not been meeting LNG export commitments. During these shortfalls, project developers have been supplementing their own production with natural gas purchased from the domestic market. The Australian government implemented several initiatives to address domestic natural gas production shortages in eastern states.
Several private companies proposed to develop LNG import terminals in southeastern Australia. Of the five proposed LNG import projects, Port Kembla LNG (proposed import capacity of 0.3 Bcf/d) is in the most advanced stage, having secured the necessary siting permits and an offtake contract with Australian customers. If built, the Port Kembla project will use the floating storage and regasification unit (FSRU) Höegh Galleon starting in January 2021.