PERTH (miningweekly.com) – For the first time in more than five years, Australia’s liquefied natural gas (LNG) and petroleum exports nearly completely offset the costs of importing crude oil, petrol and other petroleum products.

Energy analyst EnergyQuest revealed on Monday that Australia’s total trade deficit across all goods and commodities reached A$3.54-billion in December of last year, compared with A$786-million in the same period in 2014.

However, despite the 40% slump in global oil prices, the value of Australian LNG and other petroleum exports almost completely offset the cost of importing crude oil, petrol and other petroleum products.

“This good outcome reflects the growth in Australian LNG exports,” EnergyQuest CEO Dr Graeme Bethune said.

“Australia’s established LNG projects – Woodside’s North West Shelf and Pluto and ConocoPhillips’ Darwin LNG – have been performing exceptionally well. Now the three new Queensland projects have joined that total LNG production flow.

“Altogether, Australian LNG production reached a record 9.1-million tonnes in the December quarter 2015, up by 48% from a year earlier. Increased LNG production has offset the fall in LNG prices resulting from the slump in oil prices.”

EnergyQuest estimated that increased LNG production improved Australia’s overall trade balance by about A$500-million in December alone.

“As LNG production continues to grow, petroleum is likely to make an increasingly positive contribution to the overall Australian trade balance. With a 33% fall in Australian dollar oil prices, we might have expected a similar fall in the country’s petroleum import bill,” Bethune said.

However, he pointed out that the fall was only half as much, with the cost of petroleum imports falling by 17% from A$2.5-billion to $2.1-billion from December 2014 to December 2015.

“The fall in Australia’s petroleum import bill is much less than the fall in oil prices for three reasons: petroleum imports are increasing, the closure of Australian refineries means imports of refined product are increasing (with refinery margins captured in Singapore rather than Australia) and Singapore refinery margins are also increasing.”

Bethune said that with the 33% fall in oil prices, a similar fall in the value of Australia’s petroleum exports was also expected.

“This is essentially what happened with the value of oil exports. However, with rising LNG production, the value of LNG production was virtually constant, despite the oil price fall and the fact that LNG prices are linked to oil prices.

“The end result was that the value of Australia’s petroleum exports held up well, despite the 33% fall in the oil price.

“Even though the fall in the cost of petroleum imports was less than the fall in the oil price, the strong export performance was sufficient to eliminate the petroleum deficit,” Bethune said.