The lies are relentless in the attack on gas reservation.
Today it is AGL’s turn.
Australia’s largest electricity generator AGL Energy said the threat of government intervention in the gas market has already triggered a market revolt with negotiations for long-term deals halted and supply pacts delayed.
Federal Labor’s signature gas policy would mandate 20 per cent of all LNG exports to be supplied to domestic users from July 2027.
But industry heavyweights are worried it will create a glut of gas and artificially lower prices, triggering domestic producers to abandon developing new projects and inflating costs in the long-term.
Riiiight. Except for two small problems.
The proposed scheme exempts existing export contracts, meaning it is 20% of bugger all until 2030 and never gets particularly high.
| Year | Exports (PJ) | Contracts (PJ) | Spot + new contracts (PJ) | Reservation Volume (PJ) | Remaining 2P (PJ) | Bass Strait Supply (PJ) |
|---|---|---|---|---|---|---|
| 2015 | 420 | 700 | -280 | -56 | 38,000 | 680 |
| 2016 | 940 | 950 | -10 | -2 | 37,060 | 650 |
| 2017 | 1,140 | 1,030 | 110 | 22 | 35,920 | 620 |
| 2018 | 1,190 | 1,080 | 110 | 22 | 34,730 | 590 |
| 2019 | 1,200 | 1,110 | 90 | 18 | 33,530 | 560 |
| 2020 | 1,120 | 1,120 | 0 | 0 | 32,410 | 530 |
| 2021 | 1,270 | 1,140 | 130 | 26 | 31,140 | 500 |
| 2022 | 1,177 | 1,150 | 27 | 5 | 29,963 | 470 |
| 2023 | 1,194 | 1,160 | 34 | 7 | 28,769 | 450 |
| 2024 | 1,250 | 1,170 | 80 | 16 | 27,519 | 430 |
| 2025 | 1,233 | 1,170 | 63 | 13 | 26,286 | 410 |
| 2026 | 1,230 | 1,170 | 60 | 12 | 25,056 | 390 |
| 2027* | 1,225 | 1,170 | 55 | +11 | 23,831 | 370 |
| 2028* | 1,220 | 1,165 | 55 | +11 | 22,611 | 350 |
| 2029* | 1,215 | 1,160 | 55 | +11 | 21,396 | 330 |
| 2030* | 1,210 | 1,150 | 260 | +52 | 20,186 | 310 |
| 2031* | 1,120 | 1,150 | 260 | +52 | 19,066 | 290 |
| 2032* | 1,100 | 1,100 | 260 | +52 | 17,966 | 270 |
| 2033* | 1,100 | 1,100 | 260 | +52 | 16,866 | 250 |
| 2034* | 1,100 | 1,100 | 260 | +52 | 15,766 | 230 |
| 2035* | 1,100 | 1,100 | 260 | +52 | 14,666 | 210 |
Second, AGL has sold a whopping 254Pj of cheap local gas to Santos GLNG over the last decade. From 2015.
AGL Energy Limited (AGL) today announced that it has executed an agreement with the GLNG Project participants, Total, PETRONAS, Santos & KOGAS, for the sale of 254 petajoules (PJ) of gas to the GLNG project.
The gas will be supplied at Wallumbilla over a period of eleven years commencing in January 2017 with pricing based on an oil-linked formula. AGL is able to continue to utilise Queensland gas during periods of high east coast demand.
This transaction is consistent with AGL’s objective of selling gas from existing favourable Queensland wholesale contracts into the high value Queensland market. The annual quantities are profiled to sell up to 34 PJ/year in the period 2018 to 2020 and AGL has retained flexibility in its portfolio for future sales to its consumer market. This sale is the third sale of gas from AGL’s wholesale gas portfolio into the LNG projects in Queensland, and the first long term sale to the GLNG project.
Why do and defend this?
Because AGL will charge GLNG based on the Asian export price, which is triple the local price today, making a killing in the process.
Plus, it leaves the local market short of gas, driving up electricity prices and increasing the profitability of AGL’s portfolio of power generators, gas, coal, hydro and renewables.
AGL is playing us all for chumps and is another reason why reservation is vital to removing the gas cartel distortions to failed energy markets.
