It the post-truth world run by oligarchs, corporations can lie with impunity. There is no better example than gas cartelier Santos which has made fine art form of it. Previously from The Australian:
As Santos worked toward approving its company-transforming Gladstone LNG project at the start of this decade, managing director David Knox made the sensible statement that he would approve one LNG train, capable of exporting the equivalent of half the east coast’s gas demand, rather than two because the venture did not yet have enough gas for the second.
“You’ve got to be absolutely confident when you sanction trains that you’ve got the full gas supply to meet your contractual obligations that you’ve signed out with the buyers,” Mr Knox told investors in August 2010 when asked why the plan was to sanction just one train first up.
“In order to do it (approve the second train) we need to have absolute confidence ourselves that we’ve got all the molecules in order to fill that second train.”
But in the months ahead, things changed. In January, 2011, the Peter Coates-chaired Santos board approved a $US16 billion plan to go ahead with two LNG trains from the beginning….as a result of the decision and a series of other factors, GLNG last quarter had to buy more than half the gas it exported from other parties.
…In hindsight, assumptions that gave Santos confidence it could find the gas to support two LNG trains, and which were gradually revealed to investors as the project progressed, look more like leaps of faith.
The result is history with gas export cartel creating an artificial shortage for locals and profiteering off it ever since.
And now, voila, the same liar says it has the answer! Also at The Australian:
Santos says its $3.5bn Narrabri coal seam gas project can “compete effectively” in the NSW market even if two rival LNG terminals proceed with gas prices in Sydney up to 12 per cent lower, should the development receive the go ahead.
The gas producer touts the development — which could supply half the state’s gas needs — as a solution to the tight east coast market by undercutting LNG imports and offering the cheapest new supply source in the state if it does get the nod from planning tsars.
Gas market modelling “shows that the Narrabri gas project can compete effectively to supply gas to the NSW market post-2024, even with an LNG terminal operating at Port Kembla and at Crib Point in Victoria,” Santos said in a statement to the IPC on Friday, citing ACIL Allen modelling commissioned by the producer.
“As a result of the reallocation of gas supplies and the optimisation of the transmission network, the modelling shows that gas prices in Sydney would be between 4 per cent and 12 per cent lower from 2025 onwards over the 25-year evaluation period with the Narrabri gas project than without it.”
The project can compete with imports on a contract basis because they come in at $9-10Gj, which is exactly the same price that Narrabri gas will land in Sydney. But that is not cheap. It is 300-400% higher than historic prices.
Amusingly, on a spot basis, there is no way Santos can compete. You can currently buy Aussie gas (from Santos) for $3Gj in Asia. It is busy sailing around in circles in the Coral Sea because Asian customers don’t want it.
This is the gas that should be reserved for local use, not expensive Narrabri gas which, since the NSW parliament was rolled, can now Swiss cheese the Great Artesian Basin with carcinogenic salts without paying attention to ANY of the sixteen environmental safeguards that the NSW Chief Scientist recommended.
There is no end in sight to the Asian and global gluts. It is gargantuan:
Given the gas cartel is government protected, and the Australian patsy is not going to march in the streets about it, this situation is not going to remedy itself any time soon.
If I were a high volume gas consumer I would tell STO to fuck off in the nicest possible way. Instead, I would make a commitment to gas imports at the lowest possible contact volumes (linked to Brent) to get them off the ground. Then I would buy spot gas in Asia for most of my needs (some of it from Santos!).
Of course, that does nothing for the consumer, who is being reamed on gas and electricity, so a much better idea is simply to apply $5Gj gas reservation on the cartel’s full asset spread.
Sadly that requires a government in Canberra.