Page 12 - AsianOil Week 27

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($276.6 per 1,000 cubic metres), while China Australian wholesale gas prices climbed from
paid the sixth highest prices. around AUD4 ($2.78) per GJ in 2014 to a high
Australia ranked 18th overall in terms of prices, of AUD20 ($13.83) in 2017, before collapsing
with the lowest to be found in countries with highly back to around AUD4 this year. The price spike
regulated markets where producers sold gas below followed the start-up three world-class coal-bed
the cost of production and transportation. methane (CBM) liquefaction and export pro-
The Australian Petroleum Production and jects on the country’s east coast, with the decline
Exploration Association (APPEA) seized on the attributed to tapering Asian demand and rising
report, saying it put to bed frequently repeated global supply.
claims that Australian paid more for locally pro- “[C]urrent domestic prices have softened due
duced gas than overseas buyers. to low LNG prices. Queensland LNG operators
APPEA chief executive Andrew McCon- are now looking to divert cargoes that were des-
ville said: “Even before the sharp contraction tined for the LNG spot market to the east coast
we’ve seen in gas prices this year, Australian gas domestic gas market. As a result, the eastern
users have enjoyed very competitive wholesale seaboard gas spot prices have fallen and this will
prices. The widely repeated claim that Australia’s persist until the global LNG markets dynam-
wholesale prices are higher than in the countries ics rebalance,” Wood Mackenzie senior analyst
importing our LNG has once again shown to be Daniel Toleman told NewsBase.
without foundation.” However, Australia’s gas prices are anticipated
McConville said: “Interestingly, the statis- to rise again in the future despite mounting
tics show countries with the highest gas prices pressure from the local manufacturing industry
including Chinese Taipei, South Korea, Japan, campaign for prices to remain low to help sup-
Singapore and China – well above Australia – all port economic growth.
have successful major manufacturing sectors.” “Fundamentally the Australian east coast
While acknowledging that Australia’s whole- gas market is short of gas from the early-to-
sale prices were higher than in other major pro- mid 2020s. As a result, we do not expect east
ducers such as the US, Canada, Russia and in coast gas prices near AUD4 per GJ,” Toleman
the Middle East, McConville said the difference said. “LNG import projects are unlikely to
reflected the “high cost of doing business in Aus- bring the price down. Import terminals are
tralia, and increasingly the impact of restrictions likely to be the marginal cost of supply, thus
on the development of natural resources”. creating a price floor.”™

P12 www. NEWSBASE .com Week 27 09•July•2020