Record heat in Australia amid LNG export debate

• Week-long heatwave in gas production states
• Hot summer may intensify export-domestic supply debate
• Darwin and Broome temperatures soar

SINGAPORE (ICIS)–Australian Bureau of Meteorology (BOM) has issued warnings for a severe-to-extreme heatwave in parts of Northern Territory (NT) and Western Australia (WA) from 30 September, close to LNG production hubs in Darwin and at the Woodside-operated North West Shelf.

The extreme heatwave will last for six days starting 2 October over parts of northern NT, with a larger range of the region and areas near North West Shelf experiencing the severe heatwave from 30 September to 8 October, according to the BOM forecast.

The weather data monitor said Darwin had the “hottest September in more than 100 years”.

High temperatures pose risks to cooling facilities at liquefaction plants, which may curb LNG output. This has not yet happened to LNG facilities in the areas, according to operators.

“We do not expect a significant impact to Ichthys LNG production as the heatwave is expected to last approximately 1 week and peaking today/tomorrow,” an Inpex spokesperson told ICIS 2 October.

The Chevron-operated Gorgon and Wheatstone gas facilities are “not subject to a current heatwave assessment” due to their distance from the heat center Broome, Chevron’s spokesperson told ICIS.

A Woodside spokesperson said that, “we are not experiencing any unusual weather in Karratha, where our operations are located.”

SUPPLY TENSION

Although the areas affected by the heatwave are not densely populated, hot weather ahead this upcoming southern hemisphere summer could lead to increased electricity use for air-conditioning and industrial cooling.

Australia’s 2023/24 summer electricity demand was 776MW more than 2024 winter, according to Australian Energy Regulator data.

Should the upcoming summer experience high temperatures, which is possible according to the BOM forecast, the summer-winter demand gap would further widen.

Source: Australia Bureau of Meteorology

Energy resource exports from Australia have been challenged because domestic electricity users pay premiums for local coal and gas. However, WA state recently eased an onshore gas export ban that had been in place since 2020.

The government has been urging LNG exporters to secure domestic supplies in the context of growing demand in its east coast. Gas supply would fall short of domestic demand from 2027, the Australian Competition and Consumer Commission (ACCC) said in its latest report.