🇦🇺Australia

Unaccrued Royalty Revenue on Exported LNG - Zero Royalty Contracts

2 verified sources

Definition

The Australia Institute research confirms that 56% of exported LNG attracts zero royalties. The Northern Territory Government collects no royalties on any gas exported from the NT. Six of seven LNG export terminals operating in WA and NT operate under zero-royalty frameworks. Over 4 years (recent analysis), multinational companies exported $149 billion in gas they obtained for free, including $37 billion from the NT alone.

Key Findings

  • Financial Impact: AUD 13.3 billion over 4 years (AUD 3.3 billion annually); NT portion: AUD 3.4 billion over 4 years. Hypothetical if standard royalty rates applied: 10-40% of AUD 149 billion exported base.
  • Frequency: Annual - recurring systemic loss as contracts continue
  • Root Cause: Policy/Contractual: Australian Government chose not to impose royalties on gas feeding 6 of 7 LNG terminals; no billing/collection mechanism for royalties on this portion of output

Why This Matters

The Pitch: Australian natural gas producers have exported $149 billion worth of gas over 4 years with zero royalty payments. If standard royalty rates (10-40% depending on project type per PRRT regulations) were applied to this gas, Australia would capture an additional $13.3 billion in government revenue—an average of $3.3 billion annually that is systematically not billed or collected.

Affected Stakeholders

Government Treasury/Revenue Officers, Project Economics Teams, Royalty Accounting & Collections

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Financial Impact

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Methodology & Sources

Data collected via OSINT from regulatory filings, industry audits, and verified case studies.

Evidence Sources:

Related Business Risks

Western Australian State Royalty Revenue Decline - Unrecovered Collections

AUD 138 million year-over-year decline (2023-24 vs 2024-25); if decline persists: AUD 138 million annually at risk

Regulated Gas Network Supernormal Profit Extraction - Consumer Overcharge

AUD 1.8 billion over 8 years (AUD 225 million annually); approximately 5% of typical gas consumer bills; South Australian network returned 30% to shareholders (excess of typical 8-10% allowed return)

Environmental Protection Licence Non-Compliance Fines

AUD 50,000+ fines per breach (typical range for EP Act violations); 20-40 hours/month manual monitoring

NOPSEMA Environment Plan Approval Delays

AUD 100,000+ per month idle rig costs (industry standard for approval delays)

EIS and Site-Specific EA Application Costs

AUD 500,000+ per EIS application (typical for large gas fields); 6-12 months preparation time

STTM Deviation Settlement Imbalances

AUD 100,000+ per month in settlement shortfall charges

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