Via The Australian:
Rising global gas production and falling spot prices are believed to have vastly improved the economics of an LNG import terminal being studied by AGL Energy, whose plans have sparked widespread interest from international gas sellers.
The Sydney-based energy giant has committed to naming a site in NSW, Victoria or South Australia in coming weeks as it studies the feasibility of opening an import terminal at a cost of up to $300 million in a bid to ease a potential supply shortage in tight east coast gas markets.
The expected site decision, ahead of an investment decision targeted for late next year, comes as chief scientist Alan Finkel prepares to hand in his long-awaited report into east coast energy security to a Council of Australian Governments meeting between Malcolm Turnbull and the premiers on Friday.
…“The crucial issue is the ability to buy gas either on the contract or spot market at cheap enough rates,” Macquarie said in a recent note.
“Even at low spot prices of $US5.60 per million British thermal units, we estimate that the all-in delivered cost would be $9 a gigajoule.”
Spot LNG prices in Asia were trading at $US5.15 per mmBTU, down from $US9 at the end of last year.
Contract LNG prices from Australia, which are linked to oil prices, are about $US7 per mmBTU when oil prices are $US50 a barrel.
At $10Gj it’s not just viable, it’s got 100% rentier margins for local contract users:
The Aussie dollar is a risk and the the policy risk is mountainous but if you’re largely selling term contracts then you’re hedged.
It’s a licence to print money as it stands.
