Aussie gas is much cheaper in Asia again than it is in Australia. It happened last week as Brent oil rallied and the Japan-Korea Marker for spot LNG cratered to near $7Gj from above $32Gj recently as the Asian winter warmed up. Futures point it even lower.
This means that the contract gas price paid by local Australian consumers, which is still absurdly linked to the Brent oil price at a 14% slope, has roared back while possible import prices have collapsed:
The Morrison Gas Unplan fully entrenches gas cartel power such that the Brent oil price linkage is unbreakable for 95% of east coast volumes. This is crazy on two fronts. We now effectively price local gas against two entirely irrelevant benchmarks, depleting North Sea oil, and expensive energy-poor European gas.
LNG imports remain a much better option for local gas users. The recent price spike was a freakish event driven by supply outages, COVID-19 outages, a shock cold Asian winter and China’s trade war on itself.
The forecast outlook for the globl gas surplus has actually lifted thanks to COVID-19 knocking the demand outlook. Via IEA:
And my market balance chart:
The Morrison Government is captured by the gas cartel and local manufacturers should absolutely still buy local LNG import hubs into being to break the cartel stranglehold by importing Asian spot gas volumes.
