WAEP - July 2016

Western Australia Economic Profile July 2016 The Economy Real gross state product (% change) 10%



9.1%

8%

7.0%



5.9%

6%

5.5% 5.6%

5.2% 4.3%

4%

3.4%



3.8%

3.5%

2%

2.5% 2.5% 3.0% 1.0%



1.3%



0% 2005-06

2008-09

2011-12

2014-15

Western Australia GSP

2017-18

Australia GDP

Western Australia’s gross state product (GSP) was $249 billion in 2014-15, 15% of Australia’s gross domestic product (GDP). GSP per capita was $96,475, 42% above the national average of $68,171. Real GSP rose 3.5% in 2014-15, below annual average growth of 5.3% over the past ten years. WA Treasury forecasts real GSP growth of 1.0% in 2015-16. Australia’s real GDP rose 2.3% in 2014-15 and the Australian Treasury forecasts growth of 2.5% in 2015-16.

Source: ABS 5220.0 State Accounts and 5204.0 National Accounts; WA 2016-17 Budget; and Australian 2016-17 Budget.

Real expenditure on GSP (% change)



50% 40% 30%



20% 10%



0% -10% -20% -30% 2005-06

2008-09

2011-12

Business investment

2014-15

2017-18

Merchandise exports



Mining

Merchandise exports made the largest contribution to real GSP growth in 2014-15, up 9%, above annual average growth of 5% over the past ten years. Real business investment fell 12% in 2014-15, compared with annual average growth of 12% over the past ten years. WA Treasury forecasts annual average growth of 4% in the volume of merchandise exports over the five years to 2019-20, offsetting falling real business investment over the period. Mining was the largest industry contributing to real GSP growth in 2014-15, up 10%.

Source: ABS 5220.0 State Accounts; 5206.0 Quarterly National Accounts; and 6302.0 Balance of Payments; and WA 2016-17 Budget.

Industry sectors (nominal value added) Market services(a)

$72.3b

Mining



$63.6b

Construction

$32.9b

Non-market services(b)



2013-14

$28.1b

2014-15

Manufacturing



$12.5b

Utilities(c)

$5.6b

Agriculture, forestry and fishing



$4.5b

$0b

$20b

$40b

$60b

$80b $100b

(a) Wholesale trade; retail trade; accommodation and food; transport, postal and warehousing; information , media and telecommunications; finance and insurance; rental, hiring and real estate; professional, scientific and technical; administrative and support; arts and recreation; and other services. (b) Public administration and safety; health care and social assistance; and education and training. (c) Electricity, gas, water and waste services. Source: ABS 5220.0 State Accounts.

WA Economic Profile – Jul. 2016

Page 1 of 12

The mining industry accounted for 26% of Western Australia’s GSP and 58% of Australia’s mining gross value added in 2014-15. Mining industry gross value added fell 23% to $63.6 billion in 2014-15, despite a 10% rise in volumes. Construction gross value added rose 1% to $32.9 billion in 2014-15, despite a 5% fall in volumes. Agriculture, forestry and fishing gross value added fell 23% to $4.5 billion and volumes fell 16% in 2014-15.

Release Classification: - Public

Western Australia Economic Profile July 2016 Population growth 100000

4%

75000

3%

50000

2%

25000

1%

0

0%



 



-25000

-1% 2006

2009

2012

2015

Net overseas migration

Net interestate migration

Natural increase

Population growth rate (%)



Western Australia’s population was 2.60 million in the December quarter 2015, 11% of the national population. The 2015 WA Tomorrow report forecasts a population of 3.27 million by 2026. Population rose 1.2% (30,980) in 2015, below annual average growth of 2.5% over the past ten years. Natural increase (20,683) and net overseas migration (up 14,610) offset falling net interstate migration (down 4,313) in 2015. WA Treasury forecasts annual average population growth of 1.3% in 2016-17.

Note – Annual populations are population estimates in either June (financial year) or December (calendar year) quarters. Source: ABS 3101.0 Australian Demographic Statistics.



Labour market 8%



6% 4%



2% 0%



-2% Jun-2007

Jun-2010

Jun-2013

Jun-2016 

Employment growth

Unemployment rate - WA

Unemployment rate - Aust. Source: ABS 6202.0 Monthly Labour Force.

Industry sector employment Market services(a)

 644,500

Non-market services(b)

349,500

Construction

154,800

Mining

2013-14

94,000

2014-15

Manufacturing

86,300

Agriculture, forestry and fishing

29,000

Utilities(c)

16,000

0

400,000

800,000

(a) Wholesale trade; retail trade; accommodation and food; transport, postal and warehousing; information , media and telecommunications; finance and insurance; rental, hiring and real estate; professional, scientific and technical; administrative and support; arts and recreation; and other services. (b) Public administration and safety; health care and social assistance; and education and training. (c) Electricity, gas, water and waste services. Source: ABS 6291.0.55.003 Quarterly Labour Force.


Page 2 of 12

 

Western Australia’s employment fell 0.76% (10,300) to 1.34 million in June 2016. Western Australia’s employment fell 0.6% (994) through the year to June 2016, compared with Australia’s growth of 1.9% (225,000). Western Australia’s unemployment rate was 5.7% in June 2016, down from 5.8% in the previous month and 5.9% a year ago. Australia’s unemployment rate was 5.8% in June 2016. WA Treasury forecasts annual average employment growth of 0.25% in 2016-17, with an average unemployment rate of 6.75%. In 2014-15, Western Australia’s total employment comprised market services (47%), non-market services (25%), construction (11%), mining (7%), manufacturing (6%), agriculture, forestry and fishing (2%) and utilities (1%). The State’s total employment rose 3% (34,000) to 1.37 million in 2014-15. Non-market services (up 37,700 or 12%) and construction (up 20,100 or 15%) offset falls in market services (down 7,900 or 1%), mining (down 6,300 or 6%), manufacturing (down 3,900 or 4%), utilities (down 3,900 or 20%) and agriculture, forestry and fishing (down 1,700 or 6%) in 2014-15.


Western Australia Economic Profile July 2016 Investment Commodity prices and exchange rate 200 index

US200c

150 index

US150c

100 index

US100c

50 index Jun-2007

Jun-2010

Aust. dollar (US cents)







US50c Jun-2016

Jun-2013 Non-rural (index)

Rural (index)

Note – Monthly index of commodity prices for Australia, Special Drawing Rights, 2014-15 = 100. Source: Reserve Bank of Australia, Statistical Tables.

Business investment



$100b

50%

$80b

40%

$60b

30%

$40b

20%

$20b

10%

$0b







0% 2006

2009

Total

2012

Mining capex

2015

Share of Aust. total (%)



Source: ABS 5220.0 State Accounts; 5206.0 Quarterly National Accounts; and 5625.0 Private New Capital Expenditure.

Investment in major resource projects: March 2016 LNG

$86.0b

Iron ore

$1.9b $2.7b $1.2b

Nickel

$0.4b $3.4b $0.1b $0.8b

Other(b)

$3.1b

$19.5b

$10.5b

Gas

Gold





Under construction/committed Under consideration



$9.0b



$0b

$20b

$40b

$60b

$80b

$100b

$120b

(a) Includes condensate. (b) Includes other minerals and petroleum commodities and minerals and petroleum infrastructure. Source: WA Department of Mines and Petroleum, Resource Data Files.


Page 3 of 12

The Reserve Bank of Australia’s monthly index of non-rural commodity prices fell 1% in June 2016. The annual index fell 21% in 2015-16 (down 24% in 2015). The Reserve Bank of Australia’s monthly index of rural commodity prices rose 2% in June 2016. The annual index fell 9% in 2015-16 (down 6% in 2015). The monthly average $A exchange rate rose 2.5% to US74.3 cents in June 2016. The annual average $A exchange rate fell 12% to US72.7 cents in 2015-16 (down 17% to US74.6 cents in 2015) and is forecast by WA Treasury to be US75.7 cents in 2016-17. Business investment contributed 25% of Western Australia’s GSP in 2014-15. Western Australia contributed 25% of Australia’s business investment in 2015 (26% in 2014-15). Nominal business investment fell 13.5% to $58.3 billion in 2015. It fell 5.5% to $12.8 billion in the March quarter 2016. Mining new capital expenditure fell 8% to $42.3 billion in 2015. Mining accounted for 83% of Western Australia’s private new capital expenditure and 65% of Australia’s mining investment. Mining new capital expenditure fell 22% to $8.2 billion in the March quarter 2016. In October 2015, Western Australia accounted for 56% of the value of Australia’s major resource projects under construction or committed. In March 2016, there was $94.1 billion of major resource projects under construction or committed in Western Australia and $44.3 billion under consideration. There was $86 billion of LNG projects under construction or committed and $19.5 billion under consideration. There was $1.9 billion of iron ore projects under construction or committed and $10.5 billion under consideration.


Western Australia Economic Profile July 2016 Commodity Production Western Australia’s share of minerals and petroleum production: 2015 Unit million tonnes ‘000 tonnes ‘000 tonnes million tonnes million carats ‘000 tonnes million tonnes ‘000 tonnes ‘000 tonnes tonnes

Iron ore Garnet Zircon Alumina Diamonds Rutile LNG Illmenite Nickel Gold

World % share 37 17 14 12 10 8 8 8 7 6

Aust. % share 99 98 39 34 100 28 69 62 100 68

WA 741 283 195 14 13 40 20 449 174 193

Australia 751 290 500 41 13 144 29 720 174 283

World 2,030 1,660 1,410 115 125 480 245 5,610 2,530 3,000

Source: WA Department of Mines and Petroleum, Resource Data Files; and International Group of Liquefied Natural Gas Importers, The LNG Market 2015.



Major minerals and petroleum sales Iron ore

$49.8b

LNG



$11.6b

Gold

$9.6b



Crude oil(a)

$6.2b

2014

Alumina

$5.3b

2015

Nickel



$2.6b

Base metals(b)

$1.5b

Heavy mineral sands(c)

$0.6b



$0b

$20b

$40b

$60b

$80b 

(a) Includes condensate. (b) Includes copper, lead and zinc. (c) Includes garnet, illmenite, leucoxene, zircon and rutile. Source: WA Department of Mines and Petroleum, Resource Data Files.

Minerals and petroleum accounted for 87% ($89.4b) of Western Australia’s merchandise exports in 2015. Western Australia’s minerals and petroleum sales fell 20% to $91.3 billion in 2015. Iron ore accounted for 55% ($49.8 billion) of the State’s minerals and petroleum sales in 2015. LNG accounted for 13% ($11.6 billion) of the State’s minerals and petroleum sales in 2015. Gold accounted for 10% ($9.6 billion) of the State’s minerals and petroleum sales in 2015. Other commodities’ shares of the State’s minerals and petroleum sales in 2015 were crude oil and condensate (7% or $6.2b), alumina (6% or $5.3b), nickel (3% or $2.6b), base metals (2% or $1.5b) and heavy mineral sands (1% or $558m).

Major agriculture production Wheat

$2716m

Barley



$890m

Canola



$866m

Wool

2013-14 2014-15

$540m

Cattle and calves



$655m

Sheep and lambs $0m

$479m

$1000m

$2000m

$3000m

Western Australia’s agricultural commodity production fell 8% to $7.9 billion in 2014-15. Production fell for wheat (down 17% or $545m), canola (down 18% or $194m), barley (down 11% or $109m) and wool (down 7% or $41m) in 2014-15. Production rose for cattle and calves (up 13% or $76m) and sheep and lambs (up 17% or $69m) in 2014-15.

$4000m

Source: ABS 7501.0 Value of Principal Agricultural Commodities Produced and 7503.0 Value of Agricultural Commodities Produced.


Page 4 of 12


Western Australia Economic Profile July 2016 Exports Merchandise exports $150b 

$100b



$50b



$0b 2006

Iron ore

2009

Gold

2012

LNG

2015

Crude oil(a)

Other

Exports of goods and services accounted for 47% of Western Australia’s GSP in 2014-15. Merchandise exports accounted for 45% of GSP while services exports accounted for 2.5% of GSP. The value of Western Australia’s merchandise exports fell 17% to $102.8 billion in 2015. The State’s merchandise exports in 2015 were mainly iron ore (47%), gold (13%), LNG (9%) and crude oil and condensate (6%).

(a) Includes condensate. Source: ABS 5368.0 International Trade in Goods and Services; 5220.0 State Accounts; and 5206.0 Quarterly National Accounts.



Major trading partners: 2015

Western Australia accounted for 41% of Australia’s merchandise exports in 2015 (44% in 2014-15), including large shares China $54.1b $5.3b of national exports to China (67%), Japan (42%) and Korea (40%). Japan $16.7b $2.3b  China was the State’s largest export market in 2015 ($54.1b or 53%), followed Exports Korea $7.1b $3.3b by Japan ($16.7b or 16%).  The State’s exports fell to both China Imports (down 15% or $9.4b) and Japan (down Singapore $3.6b $2.5b 31% or $7.4b) in 2015.  In the December quarter 2015, the USA $1.6b $3.0b State’s exports fell 10% to $4 billion to China but rose 4% to $1.4 billion to Japan. $0b $10b $20b $30b $40b $50b $60b $70b  China was the State’s largest source of Source: ABS 5368.0 International Trade in Goods and Services. imports in 2015 ($5.3b or 15%), followed by Korea ($3.3b or 9%). Major minerals and petroleum export markets: 2015 Iron ore China Japan Korea Taiwan Other Total Alumina UAE China Bahrain South Africa Other Total

$million 38,190 5,272 3,505 1,097 258 48,323 559 510 387 356 1,478 3,290

% 79 11 7 2 1 100 17 16 12 11 45 100

1

Petroleum Japan Korea China Singapore Other Total 2 Base metals China Korea Japan Philippines Other Total

$million 7,582 3,143 1,322 830 2,655 15,534

% 49 20 9 5 17 100

888 678 429 335 512 2,841

31 24 15 12 18 100

Gold China Singapore India Thailand Other Total Nickel Malaysia China Singapore Japan Other Total

$million 8,924 2,063 930 673 1,201 13,791

% 65 15 7 5 9 100

1,291 580 152 126 406 2,556

51 23 6 5 16 100

1

Includes LNG, crude oil and condensate and LPG. Includes copper, lead and zinc. Source: WA Department of Mines and Petroleum, Resource Data Files. 2


Page 5 of 12


Western Australia Economic Profile July 2016 1

Agricultural and food exports



$8b $6b $4b



$2b 

$0b

2005-06 Wheat

2008-09 Barley

2011-12

Canola

Wool

2014-15

Rock Lobster

Other



1

Agriculture, forestry and fishing; natural and cultured pearls; and food and beverage manufactured products. Source: ABS and Department of Agriculture and Food Western Australia.

Western Australia’s agricultural and food exports rose 3% to $7.8 billion in 2014-15, including wheat (38%), barley (13%), canola (10%), wool (6%) and rock lobster (6%). Wheat exports rose 6% to $3 billion in 2014-15, in line with annual average growth of 6% over the past ten years. Western Australia’s major agricultural and food export markets in 2014-15 were China (23%), Indonesia (14%), Japan (9%), Korea (6%) and Vietnam (4%). Western Australia’s agricultural and food exports to China rose 30% to $1.8 billion in 2014-15.

Major agricultural and food export markets: 2014-15 Wheat Indonesia Korea Japan Vietnam Other Total Wool China India Czech Republic Italy Other Total

$million 969 348 271 218 1,186 2,992

% 32 12 9 7 40 100

416 33 17 4 7 477

87 7 4 1 2 100

Barley China Japan Kuwait South Africa Other Total Rock Lobster Vietnam Hong Kong USA Japan Other Total

$million 822 99 29 14 33 997

% 82 10 3 1 3 100

424 6 5 3 4 443

96 1 1 1 1 100

Canola China Belgium Japan UAE Other Total Cattle Japan Indonesia Israel China Other Total

$million 205 142 136 106 217 806

% 25 18 17 13 27 100

69 67 54 36 11 237

29 28 23 15 5 100

Source: ABS and Department of Agriculture and Food Western Australia.



Services exports $8b



$6b $4b



$2b $0b

2006

2009

Personal travel Transport Property & business services

2012

2015 

Education travel Business travel Other

Source: ABS 5368.0.55.003 International Trade in Services by State.


Page 6 of 12

Western Australia contributed 10% of Australia’s services exports in 2015 (10% in 2014-15). Western Australia’s services exports rose 3% to $6.6 billion in 2015, below annual average growth of 5% over the past ten years. The State’s services exports in 2015 included personal travel (30%), education travel (21%), transport (16%), property and business services (15%) and business travel (10%). The State’s services exports growth in 2015 came mainly from increases in personal travel (up 9%), education travel (up 10%) and property and business services (up 13%).


Western Australia Economic Profile July 2016 Iron Ore 1

2

Iron ore and steel product prices US$200/t

200 index

US$150/t

150 index

US$100/t

100 index

US$50/t

50 index

US$0/t Jun-07

Jun-10 Iron ore

0 index Jun-16

Jun-13







Steel product index

1

Monthly average China spot prices in nominal US dollars (cost and freight). Monthly average China steel product price index. Source: World Bank, Commodity Markets, Monthly Price Data; and CEIC, China Premium Database.

Iron ore and steel prices are closely related given iron ore accounts for around half of the cost of producing steel at current prices. Around 1.4 tonnes of iron ore is required to produce a tonne of crude steel. The monthly average price of iron ore fell 5.5% to US$52.0 a tonne in June 2016. The annual average price fell 28% to US$51.6 a tonne in 2015-16 (down 42% to US$55.8 a tonne in 2015). The monthly average price of steel products fell 10% in June 2016. The annual average price fell 21% in 2015-16 (down 27% in 2015).

2

Major global iron ore producers: 2014 

Western Australia Brazil

China India



Russian Federation

Ukraine



Exported

South Africa

Consumed domestically/stockpiled

USA

Iran Canada 0Mt

200Mt

400Mt

600Mt

800Mt

Western Australia is the world’s largest iron ore producer, accounting for 37% of world production and 49% of world seaborne exports in 2014. The State produced 697 million tonnes of iron ore in 2014. Western Australia accounted for 27% of global crude iron ore reserves in 2015. The State had an estimated 53 billion tonnes of iron ore reserves in 2014-15, which could sustain its iron ore industry for another 69 years at current production rates.

Source: United Nations Conference on Trade and Development, The Iron Ore Market 2015; and WA Department of Mines and Petroleum, Resource Data Files.



Major iron ore export markets 800Mt

600Mt 

400Mt 

200Mt

0Mt 1995

2000 China

2005 Japan

2010 Korea

2015 Taiwan

Source: ABS 5368.0 International Trade in Goods and Services.


Page 7 of 12



In 2015, Western Australia accounted for more than half of iron ore imports to China (63% or 612mt), Japan (54% or 71mt), Korea (69% or 52mt) and Taiwan (66% or 15mt). China made up 81% of the State’s iron ore export volumes in 2015, followed by Japan (9%), Korea (7%) and Taiwan (2%). The State’s iron ore exports to China rose 11% to 612 million tonnes in 2015, below annual average growth of 18% over the past ten years. The State’s iron ore exports fell to Japan in 2015 (down 7% to 71mt), but rose to Korea (up 1% to 52mt) and Taiwan (up 1% to 15mt).


Western Australia Economic Profile July 2016 Iron ore sales $80b

160 index

$60b

120 index

$40b

80 index





$20b

40 index

$0b



0 index 1995

2000

2005

Value

2010

Volume index

2015

The value of Western Australia’s iron ore sales fell 23% to $49.8 billion in 2015, compared with annual average growth of 16% over the past ten years. The volume of iron ore sales rose 6% to 741 million tonnes in 2015, below annual average growth of 12% over the past ten years. The annual average price of iron ore sales fell 28% to A$67.2 a tonne in 2015.

Price index

Note – Base year of index is 2014. Source: WA Department of Mines and Petroleum, Resource Data Files.

Iron ore sales and price outlook 1000Mt

US$200/t

800Mt

US$160/t

600Mt

US$120/t

400Mt

US$80/t

200Mt

US$40/t





0Mt

US$0/t 2005-06

2008-09

2011-12

Volume (Mt)

2014-15

2017-18

WA Treasury forecasts a rise of 98 million tonnes in Western Australia’s iron ore sales to 817 million tonnes, between 2014-15 and 2019-20 – an annual average growth rate of 3%. WA Treasury forecasts the annual average price of iron ore will fall to US$47.7 a tonne in 2016-17, before recovering to US$54.0 a tonne by 2019-20.

Price (US$/t)

Source: WA Department of Mines and Petroleum, Resource Data Files; World Bank Commodity Markets, Monthly Price Data; and WA 2016-17 Budget.

Major iron ore producers, ports and projects: 2015 Exports (mtpa)

Target (mtpa)

319 261 167

360 290 180

424 164 130 13 11

495 210 150 30 20

8 70 55

28 70 55

12

Major producers : Rio Tinto BHP Billiton Fortescue Metals Group 3 Major ports : Port Hedland Cape Lambert Dampier Geraldton Esperance 14 Major projects : CITIC – Sino Iron - Cape Preston (A$11.1 billion) Rio Tinto – Pilbara 360 Expansion (A$6.1 billion) Hancock Prospecting – Roy Hill (A$10.0 billion)

Date Reach target in: 2017 2017 Target installed by: 2018 2015 2015 Start operation in: Sep.2013 Jun.2015 Dec.2015

1

Wet tonnes. inclusive of third party tonnes. Dry tonnes. 4 Recently completed and ramping up production, under construction or committed. Source: Producer quarterly production and investment reports; Pilbara Ports Authority Strategic Plans; and ABS 5368.0 International Trade in Goods and Services. 2 3


Page 8 of 12


Western Australia Economic Profile July 2016 Liquefied Natural Gas (LNG) Petroleum prices US$20/mmBtu

US$160/bbl

US$15/mmBtu

US$120/bbl

US$10/mmBtu

US$80/bbl

US$5/mmBtu

US$40/bbl

US$0/mmBtu Jun-07

Jun-10





US$0/bbl Jun-16

Jun-13

WTI crude oil (US$/bbl)

Japan LNG

USA (Henry Hub) gas

Europe pipeline gas

The monthly average price of West Texas Intermediate (WTI) crude oil rose 4% to US$48.8 a barrel in June 2016. The annual average price fell 40% to US$41.8 a barrel in 2015-16 (down 48% to US$48.7 a barrel in 2015). The monthly average price of LNG imported by Japan was unchanged at US$6.25 a million British thermal unit in June 2016. The annual average price fell 41% to US$8.0 a million British thermal unit in 2015-16 (down 35% to US$10.4 a million British thermal unit in 2015).

Note – Monthly average prices in nominal US dollars. Source: World Bank, Commodity Markets Monthly Price Data.

Major global LNG exporters: 2015 Qatar

78.4Mt

Malaysia



25.0Mt

Western Australia

20.4Mt

Nigeria

19.5Mt

Indonesia

18.0Mt

Algeria

12.1Mt

Trinidad and Tobago

11.8Mt

Russian Federation

10.6Mt

Rest of Australia





9.1Mt

Oman 7.6Mt 0Mt

20Mt

40Mt

60Mt

Western Australia is the world’s third largest LNG exporter behind Qatar and Malaysia, accounting for 8% (20.4mt) of global LNG exports of 245 million tonnes in 2015. The rest of Australia (excluding Western Australia) exported 9.1 million tonnes of LNG in 2015. In 2015, most of Western Australia’s LNG exports went to Japan, as well as China, Korea and other Asian and Middle Eastern countries.

80Mt

Source: International Group of Liquefied Natural Gas Importers, The LNG Market 2015; and WA Department of State Development Estimates.

Natural gas resources by basin (trillion cubic feet): July 2015 Basin: Carnarvon Browse Bonaparte Perth Canning Total

Conventional reserves 12.5 26.3 0.1 -

Conventional resources 38.0 56.0 0.3 0.2

Tight resources 12 74

Shale resources 4-9 17 - 34 70 - 150

38.9

94.5

86

91 - 193







Source: WA Department of Mines and Petroleum.


Page 9 of 12

Western Australia accounted for 1.1% of global natural gas reserves in 2015, according to the BP Statistical Review of World Energy. In July 2015, the WA Department of Mines and Petroleum estimated the State had 39 trillion cubic feet of conventional natural gas reserves tied to producing LNG and domestic gas facilities and 94 trillion cubic feet of conventional natural gas resources in non-producing fields. Western Australia’s 39 trillion cubic feet of conventional natural gas reserves in producing fields in July 2015, could sustain its LNG and domestic gas industry for another 29 years at current production rates.


Western Australia Economic Profile July 2016 LNG sales $15b

120 index 

$10b

80 index

$5b

40 index

$0b

0 index

The value of Western Australia’s LNG sales fell 26% to $11.6 billion in 2015, compared with annual average growth of 10% over the past ten years. The volume of LNG sales fell 3% to 20.4 million tonnes in 2015, compared with annual average growth of 6% over the past ten years. The annual average price of LNG sales fell 24% to A$10.9 a million British thermal unit in 2015.



1995

2000 Value

2005

2010

Volume index



2015 Price index


LNG sales, capacity and oil price outlook 60Mt

US$120/bbl

40Mt

US$80/bbl

20Mt

US$40/bbl

0Mt 2005-06 2008-09 2011-12 2014-15 2017-18 Prelude Gorgon North West Shelf



The WA Department of State Development expects Western Australia’s LNG production capacity to grow from 20.6 million tonnes a year in 2014-15 to 49.1 million tonnes a year in 2018-19, when the Gorgon, Wheatstone and Prelude projects are complete. WA Treasury forecasts the annual average price of West Texas Intermediate (WTI) crude oil will rise to US$44.4 a barrel in 2016-17 and recover further to US$50.9 a barrel by 2019-20.



US$0/bbl

Wheatstone Pluto WTI crude oil price (US$/bbl)

Source: WA Department of Mines and Petroleum, Resource Data Files; World Bank Commodity Markets, Monthly Price Data; WA 2016-17 Budget; and WA Department of State Development Estimates.

Major LNG producers and projects: 2015 Exports (mtpa)

Capacity (mtpa)

Start operation

6.4 2.5 2.5

6.7 10.2 6.7

-

16.0 4.3 20.4

16.7 4.3 15.6 36.6

Aug.1989 Apr.2012 Mar. 2016

-

8.9 3.6 12.5 49.1

Jun.2017 Jun.2017 Sep.2017 Dec.2017 Dec.2019

1

Major producers : Woodside Chevron Shell Operating projects: North West Shelf (A$27 billion) Pluto (A$15 billion) Gorgon – Train 1 of 3 (A$55 billion) Total operating Major projects under construction or committed: Wheatstone (A$29 billion) Prelude FLNG (A$13 billion) Ichthys (A$19 billion in WA) NWS - Persephone (A$1 billion) NWS - Greater Western Flank 2 (A$3 billion) Total capacity under development Total capacity operating and under development 1

Capacity of major producers is their share of the total capacity of operating projects. Source: Producer quarterly production and investment reports; and the WA Department of State Development.


Page 10 of 12


Western Australia Economic Profile July 2016

$15b

$10b

$5b

$0b 1995

2000 Value

Other Major Mineral and Petroleum Commodities Gold sales  The monthly average price of gold rose 150 index 1% to US$1,276 an ounce in June 2016. The annual average price fell 5% to US$1,168 an ounce in 2015-16 (down 8% 100 index to US$1,161 an ounce in 2015).  The value of Western Australia’s gold sales rose 10% to $9.6 billion in 2015, below annual average growth of 12% over 50 index the past ten years.  The volume of gold sales rose 0.1% to 193 tonnes in 2015, below annual 0 index average growth of 1% over the past ten 2005 2010 2015 years.  The annual average price of gold sales Volume index Price index rose 10% to A$1,403 an ounce in 2015.


Crude oil and condensate sales $16b

160 index

$12b

120 index

$8b

80 index

$4b

40 index

$0b

0 index



1995

2000 Value

2005

2010

Volume index





2015

The value of Western Australia’s crude oil and condensate sales fell 35% to $6.2 billion in 2015, above annual average decline of 3% over the past ten years. The volume of crude oil and condensate sales rose 7% to 15 gigalitres in 2015, compared with annual average decline of 2% over the past ten years. The annual average price of crude oil and condensate sales fell 39% to A$66.2 a barrel in 2015.

Price index


Alumina sales $8b

160 index

$6b

120 index

$4b

80 index

$2b

40 index







$0b

0 index 1995

2000 Value

2005 Volume index

2010

2015 Price index



The monthly average price of aluminium rose 3% to US$1,591 a tonne in June 2016. The annual average price fell 18% to US$1,543 a tonne in 2015-16 (down 11% to US$1,665 a tonne in 2015). The value of Western Australia’s alumina sales rose 15% to $5.3 billion in 2015, above annual average growth of 4% over the past ten years. The volume of alumina sales fell 1% to 14 million tonnes in 2015, compared with annual average growth of 2% over the past ten years. The annual average price of alumina sales rose 16% to A$382 a tonne in 2015.



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Western Australia Economic Profile July 2016 Regions of Western Australia Prelude FLNG Ichthys LNG

Reference periods: Mining sales including petroleum (2015) Agricultural production (2010-11) Population (2014-15) Labour market (March quarter 2016)

Browse FLNG

Argyle Diamond Mine

Pilbara (including offshore) Mining sales: $69.5b Agricultural production: $61m Population: 65,859 (-0.7%) Employed: 47,921 Unemployed: 1,465 (3.0%) Dampier Gorgon LNG

Wheatstone LNG

Cape Lambert Anketell

Derby

James Price Point Broome

Kimberley Mining sales: $683m Agricultural production: $255m Population: 38,801 (-0.2%) Employed: 17,036 Unemployed: 2,890 (14.5%)

Port Hedland

Karratha North West Shelf/ Pluto LNG Onslow

Gascoyne Mining sales: $111m Agricultural production: $82m Population: 9,904 (-0.2%) Employed: 5,094 Unemployed: 495 (8.9%)

Tom Price Paraburdoo

Mid West Mining sales: $2.7b Agricultural production: $634m Population: 57,974 (-0.1%) Employed: 29,205 Unemployed: 2,430 (7.7%)

Carnarvon

Oakajee Geraldton

South West Mining sales: $2.4b Agricultural production: $640m Population: 175,949 (+1.7%) Employed: 93,346 Unemployed: 4,496 (4.6%)

Newman

Perth-Peel Mining sales: $5.1b Agricultural production: $440m Population: 2,046,598 (+1.5%) Employed: 1,066,007 Unemployed: 67,877 (6.0%)

Goldfields-Esperance Mining sales: $8.8b Agricultural production: $584m Population: 60,532 (-0.9%) Employed: 34,466 Unemployed: 2,188 (6.0%) Kalgoorlie

PERTH Pinjarra Boddington Bunbury

Wheatbelt Mining sales: $2.0b Agricultural production: $1.9b Population: 74,473 (-0.2%) Employed: 33,279 Unemployed: 1,885 (5.4%) Ravensthorpe Esperance

Great Southern Mining sales: $8.5m Agricultural production: $787m Population: 60,169 (+0.7%) Employed: 25,458 Unemployed: 1,483 (5.5%)

Albany Source: WA Department of Mines and Petroleum, Resource Data Files; ABS 7503.0 Value of Agricultural Commodities Produced (2011 Agricultural Census); ABS 3218.0 Regional Population Growth; and Department of Employment, Small Area Labour Markets.


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