JOHANNESBURG (miningweekly.com) – Australia’s liquefied natural gas (LNG) exports have increased by 53.2% quarter-on-quarter to 10.1-million tonnes in the three months ended March, as production from Queensland’s projects ramped up faster than expected.

For the first time, Queensland’s LNG exports surpassed that of Russia, with the Australian state exporting 3.8-million tonnes of LNG, compared with Russia’s 2.5-million tonnes.

“Queensland’s performance is extraordinary, from zero LNG exports as recently as 18 months ago to more than Russia already,” energy market analyst EnergyQuest CEO Dr Graeme Bethune said on Thursday.

Shell’s Queensland Curtis LNG project shipped 31 cargoes of 2.1-million tonnes, Santos’s Gladstone LNG project shipped 16 cargoes of nearly one-million tonnes and Origin Energy-Conoco Phillips’s Australia Pacific LNG project shipped 11 cargoes of about 700 000 t.

The first cargo from the Gorgon project, in Western Australia, also contributed to Australia’s overall quarter-on-quarter improvement.

Despite a 36% quarter-on-quarter fall in the average Australian LNG export price owing to lower oil prices, Australia’s first-quarter LNG export revenue decreased only slightly to $4.47-billion, as a result of the higher export volumes.

EnergyQuest reported that LNG output was now Australia’s largest component of petroleum production. Petroleum output increased by 26.4% quarter-on-quarter to 162.7-million barrels of oil equivalent.

Domestic gas production fell marginally to 262.6 PJ, although domestic gas production increased by 3% quarter-on-quarter in Western Australia to a record 94.7 PJ.

Total Australian natural gas and ethane production was up 33% in the quarter compared to the March 2015 period, at 774.1 PJ, with increases in all basins except Bonaparte, Perth and Otway.

The report found that while East Coast electricity demand had started to rise after years of flat or negative growth, coal and renewable-energy sources were meeting that demand at the expense of gas, with gas-fired generation falling 14% quarter-on-quarter in the March period.

Meanwhile, the EnergyQuest report stated that the failure of the subsea power link between the mainland and Tasmania had cost the island economy about A$560-million since the outage started in late December.

Tasmania’s average power price jumped quarter-on-quarter by over 350% in the March period to $176.92/MWh. During the three month period, the State’s peak power price soared more than 500% to $257.36/MWh.

“The estimates do not take into account the economic cost of lost production by the larger industrial gas users in Tasmania. We have also assumed that Tasmanian power prices would have increased anyway to some degree as in other East Coast states,” Bethune said.

The new estimates were based on the volume of electricity generated in Tasmania between December 2015 and April 2016, multiplied by the difference in power prices between the most recent period and the corresponding period 12 months previously.

Electricity prices on the East Coast mainland in 2015/16 were 17.5% higher than in 2014/15 and the $560-million estimate assumed that there would have been a similar increase in Tasmania, even without the Basslink failure.

Bethune said that the Tasmanian situation would have been worse without the back-up of Victorian gas supplies from Longford via the Tasmanian gas pipeline.

During the first quarter, gas supplied 30% of Tasmania’s electricity, up from virtually zero a year earlier.

“Gas could have actually done a lot more but it took a month from the time of the Basslink failure to recommission the gas turbines that had been earmarked for sale at the Tamar Valley power station,” Bethune said.

Former Howard government Minister, Warwick Smith and the Clean Energy Finance Corporation were undertaking a study into a duplicate cable, Basslink 2, at an estimated cost of $1-billion.