Ah, the gas cartel, that wondrous beast that knows no bounds of decency. Via Petroleum Australia:
Australia Pacific LNG (APLNG), the country’s largest liquefied natural gas exporter on the east coast, has agreed to a substantial price reduction under its flagship 7.6 million tonne per annum contract with China’s Sinopec.
The move, anticipated to cost APLNG close to $2 billion over the next five years, is being seen as clear evidence that global shifts in LNG markets are now directly impacting Australia’s gas sector.
The price cut follows a comprehensive review of the long-term contract, which runs until 2035, and comes amid a rapidly changing global LNG landscape.
IEEFA estimates that the new contract price could be as low as $13.50 per gigajoule, broadly in line with recent domestic gas prices despite the added costs of liquefaction
Meanwhile, in Australia, the price is $16.24.
Now, this is a comparison between contract and spot prices, so it is not entirely fair. However, local contract prices are around $14Gj, so Aussie gas is still cheaper in China than it is in Australia, despite $2-3Gj in liquefaction and shipping costs.
Victoria is unprepared, according to the AFR:
Victoria has used more than 13% of its expected gas for energy generation for the entire year in just three days as breakdowns at a coal power plant and feeble renewable generation force it to rely on the fossil fuel vilified by the Allan state government to keep the lights on.
That’s Albo for you. Always working for China. Never for you.
The answer remains straightforward.
Peter Dutton’s superb gas reservation policy, which used export levies to force the cartel to supply its spare spot gas locally.
Plus build out a little storage or pipelines south.
Regular readers will know the rest. Gas is a key marginal price setter in the wholesale market, and so expensive gas means expensive wholesale electricity prices.
Albo appears to have no plan to fix it.
And so we have reached peak stupid as a nation, in which local states are plundered by China while they attack each other. From the AFR:
Victoria cannot rely on pulling more gas from Queensland to shore up an energy system pushed to the edge by a cascading set of breakdowns and concerns over the reliability of renewables, with the pipeline flowing south already at full capacity.
Queensland’s Liberal-National government remains staunchly opposed to further propping up the southern state’s energy grid, saying it doesn’t have the gas supply capacity to keep “bailing out Victoria’s bad decisions”.
But Queensland Natural Resources Minister Dale Last told AFR Weekend his state would refuse to divert further supply and blamed the critical energy constraints on the Victorian Labor government’s refusal to back new gas projects.
For god’s sake, what gas projects? Bass Strait is empty. Unconventional Gippsland reserves are highly speculative.
Victoria has supplied much of the east coast for fifty years with gas, including QLD.
If there is a gas bludger on the east coast, it is NSW, which does have proven undeveloped reserves.
But, more to the point, why are we privileging cheap gas to China, which now sails nuclear-capable PLAN military drills off our cities, while we charge ourselves out of business?
