The Department of Industry, Innovation and Science (DIIS) has released the December 2018 edition of the Resources and Energy Quarterly, which states that Australia’s resources and energy export earnings are on track for a record-breaking 2019.
Supported by a weaker Australian dollar in 2018-19, the DIIS expects Australia’s resource and energy exports to hit a new record high of $264 billion, before falling back to $241 billion (the second highest on record) in 2019–20.
The December report further states that Australia’s resources and energy export volumes will likely show firm growth over the outlook period, yet it is expected that the prices of Australia’s major resource commodities will drift lower in 2019–20, due to moderating demand and rising supply.
- After price volatility in the December quarter, oil prices are expected to settle over the report’s 2018-19 outlook period as production increases balance consumption growth.
- The Brent crude oil spot price is forecast to average US$72 a barrel in 2020.
- Australia’s petroleum export volumes are also forecast to increase from 226 thousand barrels a day in 2017–18 to 319 thousand barrels a day in 2019–20, supported by new liquefied natural gas (LNG)-related condensate capacity.
- Lastly, higher volumes growth is expected to support export earnings growth over this financial year, with export earnings predicted to rise from $7.0 billion in 2017–18 to $11 billion in 2019–20.
- LNG is expected to see the largest increase in export value of any commodity this year and is predicted to increase by $19 billion from $31 billion in 2017-18 to $50 billion in 2018-19, driven by higher export volumes and higher prices.
- The final two LNG projects in Australia’s recent wave of LNG investment are also expected to drive Australia’s LNG exports to increase from 62 million tonnes in 2017–18 to 78 million tonnes in 2019–20.
Minister for Resources and Northern Australia, Matt Canavan, said while this strong growth saw Australia overtake Qatar as the world’s largest gas exporter last month, Australia will need new investment in the next wave of gas projects to stay on top.
“Both Qatar and the United States will have new gas production and infrastructure coming on line in future years that will challenge Australia’s lead,” he commented.
“The industry’s strong results can only continue if new investment is encouraged and the development of projects proceeds efficiently,” Minister Canavan said.
The full December 2018 edition of the Resources and Energy Quarterly can be found here.