Gas cartelier, Origin Energy released results yesterday, via the AFR:
For the first nine months of 2017-18, sales from APLNG were up 48 per cent at $1.48 billion.
Maintenance work carried out in March on the second LNG train at the $25 billion APLNG project in Gladstone meant more gas was sold into the domestic market. APLNG still shipped 30 LNG cargoes in the quarter.
The average price Origin got for LNG rose 13 per cent in the March quarter from the December period, while average domestic prices jumped 19 per cent to $4.50 a gigajoule.
The increase in Origin’s domestic gas prices from the March quarter of 2017 was even larger, at 25 per cent, despite government and regulators saying the east coast gas price is softening.
The reason for the disparity is that long term legacy contracts can be up to ten years are still trading at $3Gj so the average price only rises as these roll off at the much higher rates today of $8-10Gj.
ORG is a staid, low growth utility enjoying uncharacteristic 25% price inflation in its gas business that goes straight to the bottom line. As a vertically integrated “gentailer” it can then also extract rentier margins triggered by the gas price driving up electricity prices.
This is a completely failed market and must be ended via big and dumb domestic reservation that holds 10% of QLD gas export volumes at home for sale at the capped price of $5Gj maximum. If the gas cartel won’t play ball then nationalise their reserves.
They’ll cough it up soon enough.
