Manufacturers’ hopes for cheap gas dashed

Original article by Angela Macdonald-Smith, Elouise Fowler, Tom McIlroy
The Australian Financial Review – Page: Online : 22-Jan-21

The federal government’s revised Heads of Agreement with Queensland LNG gas exporters on domestic gas supply has not been well received by industrial gas buyers, with the agreement imposing little or no conditions on pricing. Stephen Bell, the CEO of gas-dependent plastics maker Qenos, says the new agreement offers no basis for any confidence that competitive prices can be achieved, while Australian Workers’ Union national secretary Daniel Walton said the agreement "sells out Australian manufacturing workers". Federal Resources Minister Keith Pitt claims the government had never set a specific price target for gas.

CORPORATES
QENOS PLASTICS PTY LTD, AUSTRALIAN WORKERS’ UNION-FEDERATION OF INDUSTRIAL, MANUFACTURING AND ENGINEERING EMPLOYEES, AUSTRALIA. DEPT OF INDUSTRY, SCIENCE, ENERGY AND RESOURCES

High LNG price sends chill up buyers’ spines

Original article by Angela Macdonald-Smith
The Australian Financial Review – Page: 13 & 16 : 6-Jan-21

Credit Suisse energy analyst Saul Kavonic says it is possible that there will be a return to double-digit domestic gas prices in 2021. His comments are on the back of North Asian LNG spot prices rising to a six-year high, due to a combination of a supply squeeze and freezing winter temperatures, while the Australian Competition & Consumer Commission is predicting a LNG netback price in February of $15.52 a gigajoule, 78 per cent higher than January.

CORPORATES
CREDIT SUISSE (AUSTRALIA) LIMITED, AUSTRALIAN COMPETITION AND CONSUMER COMMISSION, WOODSIDE PETROLEUM LIMITED – ASX WPL, ORIGIN ENERGY LIMITED – ASX ORG, SANTOS LIMITED – ASX STO

Gas intervention could backfire: Santos

Original article by Perry Williams
The Australian – Page: 17 : 16-Oct-20

Andrew Liveris, an adviser to the federal government, contends a gas price of $4 a kilojoule is an achievable target for the east coast market. However, gas producers believe such a target is not realistic, and Santos CEO Kevin Gallagher has told the annual Citi Annual Investment Conference that the $4 target is too ambitious. Gallagher says "meddling on price settings" by the federal government would put at risk new supply and investment, while he says that increasing gas supply will help to bring about lower prices.

CORPORATES
SANTOS LIMITED – ASX STO

Importing LNG cheaper

Original article by Mark Ludlow
The Australian Financial Review – Page: 3 : 11-Jun-20

Jemena MD Frank Tudor says a gas pipeline linking Western Australia to the east coast is not a viable option, as the cost of transporting gas across the country would be prohibitive. He argues that a proposed LNG import terminal at Port Kembla would be much more cost-effective than the $6bn transcontinental pipeline that has been put forward by the National COVID-19 Coordination Commission. Jemena plans to link its eastern gas pipeline to the import terminal.

CORPORATES
JEMENA LIMITED, AUSTRALIA. NATIONAL COVID-19 COORDINATION COMMISSION

Cheap gas to power recovery

Original article by Phillip Coorey
The Australian Financial Review – Page: 1 & 4 : 20-May-20

Ensuring that the east coast has access to affordable gas will be part of the federal government’s strategy to boost the economy in the wake of the pandemic. The National COVID-19 Co-ordination Commission is looking at a range of options for reducing the domestic price of gas; chairman Nev Power says these could include building a pipeline from Western Australia’s offshore gas fields to Moomba in South Australia. He adds that another option could be to relocate energy-intensive manufacturing to WA, where gas prices are lower due to a domestic gas reserve.

CORPORATES
AUSTRALIA. NATIONAL COVID-19 COORDINATION COMMISSION

Gas pressure rises as Asian demand cools

Original article by Perry Williams
The Australian – Page: 17 & 20 : 17-Feb-20

Australian LNG producers are facing a tougher trading environment in 2020, according to the Australian Energy Regulator, with Asian buyers seeking better deals and reducing the volumes they purchase. Australia supplied 49 per cent of China’s LNG needs in 2019, but demand for LNG in China in 2020 may now only increase by four per cent, compared to a previous forecast of 13 per cent. However, falling Asian LNG spot prices could be good news for Australian gas consumers, according to the AER, as it gives them more bargaining power when striking short-term gas deals with gas exporters.

CORPORATES
AUSTRALIAN ENERGY REGULATOR

Activists call for blanket cap on Qld LNG exports

Original article by Angela Macdonald-Smith
The Australian Financial Review – Page: 21 : 26-Sep-19

The Australia Institute and the Lock The Gate Alliance are among the activist groups that have urged the federal governance to impose a cap on Queensland’s LNG exports. They contend that such a cap would put downward pressure on domestic gas prices. Another option that has been advocated by some activists is to amend the Australian Domestic Gas Security Mechanism to include a price trigger. The federal government is reviewing the ADGSM, which has not been utilised to date.

CORPORATES
THE AUSTRALIA INSTITUTE LIMITED, LOCK THE GATE ALLIANCE INCORPORATED, AUSTRALIA. DEPT OF INDUSTRY, INNOVATION AND SCIENCE, ENERGY USERS ASSOCIATION OF AUSTRALIA, ORIGIN ENERGY LIMITED – ASX ORG, AGL ENERGY LIMITED – ASX AGL, ESSO AUSTRALIA PTY LTD, BHP GROUP LIMITED – ASX BHP, REMAPAK PTY LTD, CLAYPAVE PTY LTD

Senators demand gas surplus for tax cuts

Original article by Angela Macdonald-Smith, Tom McIlroy
The Australian Financial Review – Page: 1 & 4 : 27-Jun-19

Centre Alliance senator Rex Patrick has presented the federal government with a number of policy demands in return for supporting its income tax cuts package. Amongst other things, Patrick wants the Australian Domestic Gas Security Mechanism to be strengthened to ensure that the east coast has a surplus of gas. At present, the ADGSM only requires that there is no shortfall of gas in the domestic market. The tax package is scheduled to be debated in the Senate on 4 July.

CORPORATES
CENTRE ALLIANCE, AUSTRALIA. DEPT OF INDUSTRY, INNOVATION AND SCIENCE, ORICA LIMITED – ASX ORI, SANTOS LIMITED – ASX STO, AUSTRALIAN COMPETITION AND CONSUMER COMMISSION, ONE NATION PARTY, AUSTRALIAN LABOR PARTY, AUSTRALIA. DEPT OF FOREIGN AFFAIRS AND TRADE

Gas price cut needed to save Gibson Island

Original article by Peter Ker
The Australian Financial Review – Page: 14 & 18 : 21-May-19

Incitec Pivot has posted a 2018-19 underlying net profit of $41.9m, compared with $147.1m previously. The company has warned that its fertiliser plant at Gibson Island in Queensland will close by the end of 2019 unless action is taken to address the issue of high gas prices. CEO Jeanne Johns says it will not be viable to keep the plant open until 2022 unless gas prices fall. She has declined to comment on whether the federal government should use the Australian Domestic Gas Security Mechanism to restrict gas export volumes in 2019 and 2020.

CORPORATES
INCITEC PIVOT LIMITED – ASX IPL, ENERGYQUEST PTY LTD

Gas shortage to hit within three years

Original article by Perry Williams
The Australian – Page: 19 & 22 : 27-Feb-19

EnergyQuest has forecast that states on the east coast of Australia will experience a shortage of gas by 2022, and they will have insufficient gas to meet peak demand by 2026. The consultancy has also warned that while Queensland will be able to increase supply to the east coast in the near-term, the state’s own production will begin to decline from 2025. EnergyQuest CEO Graeme Bethune says the expected shortfall means importing LNG is likely to be the best option. The looming gas shortage is also forecast to result in gas prices remaining high over the long-term.

CORPORATES
ENERGYQUEST PTY LTD, AUSTRALIAN COMPETITION AND CONSUMER COMMISSION, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIAN ENERGY MARKET OPERATOR LIMITED, SANTOS LIMITED – ASX STO, CREDIT SUISSE (AUSTRALIA) LIMITED