Gas cartel readies to gouge imports of our own gas

Gas cartel apologist, Energy Quest, is doing the dirty work as usual, at The Australian:

…Transporting gas from the three Queensland LNG export plants at Gladstone down to Melbourne would be cheaper by LNG tanker than pipeline, according to EnergyQuest, although liquefaction costs need to be taken into consideration. It estimates a cost of 54c per gigajoule to ship LNG from Gladstone to AGL’s Crib Point, compared with $2.45 a gigajoule to move gas by pipeline from the Wallumbilla hub to Melbourne.

While liquefaction charges were likely to be $1.34 a gigajoule and regasification $1.43 a gigajoule, “LNG import terminals provide a virtual pipeline to large and competitive gas resources”, Mr ­Bethune said.

And, may we ask, why would Australian consumers of gas pay for the liquifaction? The only reason we are having to import gas is because the gas cartel overbuilt the liquifaction capacity in the first place. By doing so they cornered the domestic market for gas. Now, we’re expected to subsidise this monopolist gouge by helping them recoup their losses on the liquifaction plants? I think not.

In its export net-back calculations for LNG, the ACCC makes no such provision for paying for exporter liquifaction costs. Indeed, it charges only a marginal efficiency ratio of about 50 cents to cover OPEX costs:

Any gas delivered to southern states from QLD via ship should not have to pay more than the cash cost of liquifaction which is pennies on the $1.34Gj quoted by Energy Quest. Australians should not have pay for the amortised capital costs of the very cartel that is gouging them.

The best way to ensure this is to import gas from elsewhere as cheaply as possible and to have as many import terminals as possible to promote competition. As said previously, Qatar for example is already selling gas at a 10% slope to Brent versus the 14% most large scale Aussie gas consumers pay.Even with transport costs it comes in cheaper:

If nothing else, regulate it (fat chance).

David Llewellyn-Smith

Comments

  1. Jumping jack flash

    Unfortunately it is private enterprise, and government has little jurisdiction to tell them what to do outside of basic business regulations. We all saw the pitiful failure of the Rudd Resource Rent tax when government tried to put their foot down in a “free market economy”.

    The obvious solution as you say is to import gas because the domestic market is clearly broken, but even then there is likely to be some gouging applied as well, as soon as the importers and distributors of the new gas realise that there’s money to be made from the Australian public who are used to paying top dollar for their gas. And maximising income to maximise debt is as essential as breathing in the New Economy. What’s the alternative? Create your own gas (Prrt!)?
    Not use gas at all and use electricity instead? Nope. Same gouging applies.

    Go off-grid solar. Vote with your feet. Let them gouge their broken system until it collapses under the weight of their own greed.

    Even Aldi raise their prices and shrink their packaging.