Australian LNG

From the AFR: Victoria’s Ace Metal Treatment Services has found a just-bearable fix to its gas supply problems – but it’s come at a hefty price.

From the AIG: The shortage in the domestic market could be between 10 PJ and 54 PJ per year if AEMO is right, or somewhat higher if other observers are correct.

Via The Australian: The Turnbull government has renewed warnings it could foist tougher regulations on the gas sector ahead of a high-powered meeting on getting more gas to east coast domestic users and as manufacturers warn they face a “price disadvantage” compared with Japan, Europe and the US.

Via the AFR: The peak industry group has urged the Prime Minister to increase the pressure on east coast gas exporters to expand local supplies and consider restricting exports to tackle the “enormous” price impacts on energy buyers.

From the superb Credit Suisse energy team: One step forward, two steps back? We are nothing if not surprised to read this morning’s article in the AFR, suggesting that the message from the gas producers is that AEMO (and we guess therefore implicitly us) have it wrong on the looming gas shortages.

From the AFR: Cement maker Adelaide Brighton, steelmaker Arrium and 22 other major energy users in South Australia have won draft clearance from the competition regulator to jointly purchase electricity in a significant move that looks set to change the balance of power in the state’s fragile energy market.

Dalian iron ore futures have caught a little bid today though they are still down Big Iron has cratered with BHP and RIO -4% and FMG -7%: FMG’s head and shoulders top is confirmed as the neckline is vapourised: That chart says big downside ahead.

Via the AFR: Gas producers will argue the energy market regulator has it wrong on the risk of looming shortages on the east coast when they are hauled to Canberra again next week, calling into question part of the premise upon which Prime Minister Malcolm Turnbull declared an “energy crisis” last month.

Boy, is the ASX in for a nasty surprise.

Dalian is holding onto its overnight losses through the day with iron ore down -7% and coking coal -4.2%: This seems to me to be a very bearish signal.

The gas has to be transported to the south as well.

UBS has a go at it today: Executive Summary – Electricity & Gas Prices Surging We believe energy prices (both electricity and gas) are highly likely to undergo sustained upward pressure across the eastern states (SA, VIC, NSW and QLD) over the next few years.

From Gary Banks, inaugural chairman of the Productivity Commission at the AFR: Even by today’s standards, the misleading, disingenuous and partisan nature of the energy policy “debate” seemed to have plumbed new depths.

The Caixin China services PMI is out today and what is usually a pretty marginal indicator seems suddenly to have crystallised lurking China slowdown fears: The Caixin China Composite PMI™ data (which covers both manufacturing and services) pointed to a weaker increase in total Chinese output at the end of the first quarter.

Shell is out today celebrating its ongoing gas gouge: Shell today said it will supply around 8 petajoules of gas to Engie’s Pelican Point power plant in South Australia for five months over the peak winter period to help secure electricity contracts to major industrial users.

Brent oil took off overnight but then pulled right back again: At issue was US data which showed, again, that it is awash with oil.

Dalian is open and soaring.

Via Micheal West: Oil and gas leviathan Exxon Mobil has managed to pay zero tax in Australia for two years, despite making $18 billion in sales.

Brent oil is off and running again: There’s no fundamental reason for it.