China siphons Aussie gas to Europe as we are starved


The gas price is beginning to firm again in Australia breaking through $20Gj on Friday and taking power prices up with it:

Much worse lies ahead as North Asian futures super-spike:

$120Gj is equivalent to roughly $1200WM/h of electricity. In macro terms, this is an 800%+ utility bill spike coming to every household and business on the east coast. It adds 30% CPI over a year and 50% over two. A cash rate at god knows what and house prices 75% lower.


I am not sure of the precise date when the APLNG export train that has been offline in QLD resumes. You will not be surprised to hear that they will not return my calls. It has not been reported in the press as resuming operation.

What we can say is that the shuttered train has freed ample gas for the cartel to game Canberra with lower short-term prices as it mulls regulation.

If that train comes back online without Albo’s cowards imposing new price triggers in the ADGSM or export levies, then the Aussie gas and power price is going to the moon as sure as night follows day. It already is across Europe:


This brings me to another anecdote to enrage. This is how broken these “markets” are for Australia’s national interest:

China’s JOVO Group, a major LNG trader, recently disclosed that it had resold an LNG cargo to a European buyer.

A futures trader in Shanghai told Nikkei that the profit made from such a transaction could be in the tens of millions of dollars or even reach $100 million.

China’s biggest oil refiner Sinopec Group also acknowledged on an earnings call in April that it has been channeling excess LNG into the international market.

Local media have said that Sinopec alone has sold 45 cargoes of LNG, or roughly 3.15 million tonnes. The total amount of Chinese LNG that has been resold is likely above 4 millions tonnes, equivalent to 7% of Europe’s gas imports in the January-June half year.


4MT is a lot. Sinopec has a stake in APLNG in QLD so the likelihood is that east coast Aussie gas is being arbitraged to gouge Europe.

In short, Australia is not regulating the gas cartel in part for fear of upsetting China and derailing Albo’s “reset”. But China does not even need the gas and is reselling it to our allies in Europe at enormous markups.

The criminal gas cartel has no ethics, limits, or loyalty to anything other than its god of monopolist greed.


Crush it with a $7Gj ADGSM price trigger or export levy benchmarked to the same.

Or let it destroy Australia.

About the author
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 founding 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.