Gas cartel to produce more for everyone else

Via Domain:

ExxonMobil has made a final investment decision on its Bass Strait gas project, which will bring more gas to Victoria in the next five years.

The decision backing the West Barracouta field, located off Victoria’s shores, boosts ExxonMobil’s Gippsland Basin output.

Exxon did not disclose the volumes but this gas is not for Victoria. It will be extracted from Bass Strait, piped north to QLD export terminals, frozen for transport, and then shipped to north Asia.

The cartel’s  QLD export terminals are running well below nameplate capacity so they’ll buy it before we see any of it. The Gippsland JV that Exxon shares with BHP has been the most aggressive local price gouger of just about anybody. Via the ACCC:

In what a number of users described as a new practice, EOI processes or ‘auctions’ have been conducted in which prospective users need to put in a bid for their gas demand and price. This is in stark contrast to the usual practice of users seeking offers from suppliers. One of these EOI processes has been conducted by the Gippsland Basin Joint Venture (GBJV) for 2018 and 2019 supply and it is reported to have received keen interest.88 A user is reported as describing the terms as ‘not very customer friendly’.

 

Stiffen domestic reservation now.

Houses and Holes

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the fouding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.

He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.

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Comments

  1. I think we ought all be writing to our local MHR and asking their position on this, including potential Labor preselections for current LNP seats (and Greens for those of you in Page)

  2. Has been a lot of activity down at the Barry’s Beach Marine teminal , this services Bass Stait rigs, it’s usually very quiet.
    Then this morning, steaming up the Yarra, was what looked like a very large pipe/cable laying ship.
    Full throttle with Bass Strait gas!

  3. I doubt very much they would pipe all the way to Queensland and then export… how would those economics work?

    Seriously!!! I keep saying, look at the economics!!! None of this gas would ever be exported, it would be all domestic consumption only.

    Dude…