The report states that LNG demand has strengthened in Australia’s major market of North Asia. Imports in North Asia were 14.5 per cent higher than in the March 2009 quarter, spurred by record imports by Japan. Prices are averaging over $US9.00 per gigajoule (GJ), although spot prices are around $US5.50.

Australian LNG exports also continue to grow, increasing by 11.5 per cent to 4.9 million tonnes in the March quarter.

EnergyQuest Chief Executive Officer Graeme Bethune said “New Australian LNG projects continue to move forward, with the first Japanese offtake agreement for a CSG project executed between BG Group and Tokyo Gas, the Shell/PetroChina bid for Arrow Energy and continuing progress on the Gorgon, Browse, Sunrise and Prelude projects.”

Other main findings of the report include:

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* LNG production increased by 14.5 per cent, and total Australian natural gas and ethane production reached a quarterly record of 470 petajoules (PJ) in March, up by 9.9 per cent.

* Domestic gas production increased on the west coast by 3 per cent. The average Western Australian domestic gas price under existing long-term contracts continues to be low ($2.31/GJ for Apache in the March quarter) but prices under new contracts are significantly higher and there is pressure on existing gas contracts under gas price arbitrations. The average domestic gas price realised by Woodside increased by 9 per cent to $3.52/GJ, reflecting the North West Shelf price arbitration. At around $4/GJ, prices for short-term gas are also above historic contract prices.

* There continues to be a surplus of gas on the east coast. Increased use of gas for power generation, particularly in Queensland and New South Wales has contributed to an increase in gas production by 4.2 per cent in the March quarter compared with March 2009.

* Coal seam gas (CSG) production reached 49.7 PJ. However conventional gas production fell by 6.5 per cent, with lower production from the Cooper, Gippsland and Otway basins.

* Average Victorian spot prices for gas were $1.84/GJ in the March quarter, down from $3.04/GJ in the same quarter of 2009.