Via the AFR:
The project, backed by the world’s biggest LNG buyer, JERA of Japan, is a rival to the LNG import project proposed by AGL Energy for Crib Point in Victoria, and would start about a year earlier under the current schedules. Gas from the AIE project would be priced at between $8 and $10 a gigajoule, well above prices in expiring contracts of $4-$5, but still below east coast prices of early 2017
…”It is our view that more supply and more suppliers is a good thing,” said BlueScope chief executive Mark Vassella, who added that Port Kembla was the best location of the three sites being considered because of its proximity to customers and infrastructure.
Wood Mackenzie analyst Saul Kavonic said the case for LNG imports could be stronger in NSW than Victoria “as NSW is set to become the most gas-stranded state on the east coast with little indigenous production of it’s own”.
But he said the price of $8-$10/GJ cited for the AIE terminal was only “feasible” assuming LNG prices below $US7 per million British thermal units and assuming the import plant is fully utilised.
“But this won’t be sustainable,” Mr Kavonic said. “Long-term LNG prices are forecast to rise from early 2020s in order to bring on new supply, indicating LNG imports will deliver domestic gas well above $10 [per gigajoule] for most of next decade.”
So long you leave the local gas price connected to international the problem cannot be fixed. The ONLY solution is increase domestic reservation substantially and to yoke it to AUD prices.
Otherwise you’ll just see more of this:
Higher electricity and gas prices helped propel EnergyAustralia’s operating earnings up 48 per cent last year and the foreign-owned retailer is expecting to benefit from another year of high tariffs before a softening in 2019.
The improvement to $HK2.738 billion ($440 million) of operating profit in 2017 made Australia the most improved business for Hong Kong-listed CLP Group, which also operates in mainland China, India, south-east Asia as well as in its home market.
EA managing director Catherine Tanna defended the improved performance, noting that the company has often made no returns in previous years, and has suffered $1.9 billion of asset write-downs since 2006.
What is a plain vanilla utility doing printing 50% profit rises? I’ll tell you what. Fresh from awarding herself ungodly bonuses for her part in the creation of the east coast gas export cartel, Ms Tanna is now printing herself huge bonuses by gouging the entire east coast economy in the downstream electricity sector which is seeing a profits boom thanks to high priced gas setting the marginal cost of electricity in the NEM.
This makes Enron look like a child care centre.
