Price review mechanisms in a global market

2011 ◽  
Vol 51 (2) ◽  
pp. 678
Author(s):  
David Thomas ◽  
Chris Douglas
Keyword(s):  
Review Process ◽  
Cost Effective ◽  
Global Market ◽  
Commercial Arbitration ◽  
Price Review ◽  
Gas Market ◽  
Gas Fields ◽  
Substantial Change ◽  
Gas Supply

The east Australian gas market (including SA) has, throughout its history, been isolated with limited connectivity from the gas fields that supply its major centres. With the arrival of CSG, imminent LNG exports and recent increased connectivity between gas fields and customers, the east Australian gas market has undergone substantial change. Against this background, it is timely to reconsider the approach to price review mechanisms contained in long-term gas supply agreements—particularly what market will be considered in any review process and what evidence will be available to the parties to a price review (in a cost-effective way) to allow consideration of movements in that market for the purposes of re-setting the price to be paid by a customer. In this extended abstract, the author discuss the effects of CSG developments and increased connectivity on the eastern gas market along with the effect LNG can have, particularly by reference to its impact on the WA gas market. A critical analysis of various price review mechanisms is undertaken with a view to identifying appropriate price review processes and criteria for the future along with reviewing the fundamentals of a price review process—specifically, the need for any price review and associated arbitration to give rise to a justiciable dispute such that the process attracts the operation of the relevant Commercial Arbitration Act and overriding Court supervision for the purposes of any necessary subpoenas or reviews of decisions.

Evolution of the east coast gas market

2018 ◽  
Vol 58 (2) ◽  
pp. 513
Author(s):  
Philip Byrne
Keyword(s):  
East Coast ◽  
Regulatory Frameworks ◽  
The Us ◽  
Major Transition ◽  
Gas Market ◽  
Gas Fields ◽  
Eastern Seaboard ◽  
Gas Supply ◽  
Australian Industry

This extended abstract reviews how the east coast gas market is managing the major transition from being a ring-fenced domestic market to being part of an interconnected global trading market, and what still needs to be done to rebalance after half a decade of disruption. The east coast gas market has a great future ahead of it, but only if Australia acts quickly to open up access to new gas supply sources as existing gas fields mature and decline. The presence of a global liquefied natural gas (LNG) supply market on the east coast now provides an incentive for gas producers to invest in new provinces and new plays at a scale the domestic gas market could not have supported on its own. This can only be good for competition in the east coast gas market over the medium to long term, and potentially open up enormous supplies for the growth of Australian industry, akin to the US shale gas revolution. To make the most of the resources and infrastructure we now have on the eastern seaboard, there is a role for governments to play in ensuring access to resources and providing stable, coordinated, robust energy policy and regulatory frameworks that attract investment in further growth in the gas sector, the benefits of which will flow on to Australian industry more generally.

Gas price reviews in long-term contracts—past, present, and future

2014 ◽  
Vol 54 (2) ◽  
pp. 493
Author(s):  
Craig Langford
Keyword(s):  
Market Price ◽  
Future Price ◽  
The Past ◽  
Price Review ◽  
Gas Market ◽  
Current Price ◽  
Legal Concepts ◽  
Commercial Landscape ◽  
Gas Price

Price reviews in long-term gas contracts have been part of the commercial landscape in the Australian gas market. Any industry senior executive who has been heavily involved in a gas price review, in particular a review involving a gas arbitration, usually asks themselves at the end of the process if a better way exists. How can gas price reviews be improved is the basis of this extended abstract. Analysis of the past, present and future gas price reviews assists this objective. The past considers the historical nature and the commercial philosophy of price reviews addresses questions such as: Why do we need them? What price is a price review trying to establish? What is a market price in the Australian gas market context? Do price reviews determine present or future prices ? The present considers current price reviews, covering topics such as what’s good and bad practice in today’s price reviews, including the arbitration process. The future looks issues such as the role and importance of price reviews in the next 10 years, what’s needed to make gas price reviews obsolete, how do price reviews work in a transitional market with both Australian and US oil-linked-contract prices under review and better commercial and legal concepts for future price reviews.

A reserves driven view of the eastern Australian gas supply and demand balance through the 2020's

2017 ◽  
Vol 57 (2) ◽  
pp. 526
Author(s):  
Will Pulsford
Keyword(s):  
Supply And Demand ◽  
Critical Role ◽  
South Australia ◽  
Market Outcomes ◽  
Natural Gas Markets ◽  
Eastern Australia ◽  
Gas Market ◽  
Gas Fields ◽  
Key Participants ◽  
Gas Supply

The Australian Energy Market Operator (AEMO) issued a Gas Statement of Opportunities in March 2016, which reports that gas supply to the domestic and liquefied natural gas markets in eastern Australia will be largely satisfied by proved and probable reserves until 2026 and by the addition of contingent resources until 2030. However, in parallel, there are widely reported concerns by energy consumers of insufficient gas supplies to meet demand by the early 2020s and a lack of new gas supplies to replace existing expiring contracts. Gas shortages have already contributed to black outs and load shedding events in South Australia. This paper reviews the eastern Australian gas supply position at a basin level. The AEMO basin level supply forecasts are reviewed and adjusted to generate forward profiles, which are consistent with reported reserves levels, production histories and depletion behaviour of typical gas fields. The revised supply forecast is compared with the AEMO’s demand profiles, and the likely commercial behaviour of key participants in the market is considered to build a picture of the domestic gas supply-demand balance through the 2020s. This analysis provides a transparent link from market outcomes back to the underlying reserves classifications to guide interpretation of supply-demand forecasts, and highlights the critical role of key suppliers in the eastern Australian gas market in the coming decade.

Meeting demand in a new era of east coast gas supply

2019 ◽  
Vol 59 (2) ◽  
pp. 686
Author(s):  
Will Pulsford
Keyword(s):  
East Coast ◽  
New Era ◽  
Demand Growth ◽  
Historical View ◽  
Operational Life ◽  
Gas Market ◽  
The Government ◽  
Gas Fields ◽  
Project Life ◽  
Gas Supply

Historically LNG projects have been established to monetise large gas finds in remote areas with little existing gas demand. The development of gas supply to the LNG project generally stimulated demand growth in the domestic gas market. As the supplying fields depleted, the LNG projects faced competition with domestic producers for declining gas supplies, but this was late in the project life when LNG plant capital had already been recovered. Recently, LNG export projects have been established within existing mature gas markets, most notably in Australia and North America. These plants now face competition with domestic gas consumers for access to feed gas from the beginning of their operational life when strong revenue has the greatest impact on the return earned on capital invested, with the greatest stress felt in Australia. This paper considers the underlying causes of domestic price rises experienced in Australia following the start-up of LNG export supplied from gas fields linked to the domestic market and the response by both plant developers/operators and the government. This historical view is used to inform forecasts of how the east coast gas market will react to the interplay between domestic and LNG plant demand, declining Bass Strait production, maturing CSG operations, LNG imports and completion of the Northern Gas Pipeline. In particular the ability of gas supply and pipeline capacity to meet the strongly seasonal domestic demand in Victoria and to a lesser extent NSW will be examined, together with the linkage to counter-cyclical seasonal demand for LNG from the Queensland LNG export plants in the key north Asian markets.

scholarly journals The V4’s Gas Market transition towards the EU’s Energy Security

2021 ◽  
Vol 16 (2) ◽  
pp. 207-218
Author(s):  
Katarína Sárvári
Keyword(s):  
Energy Security ◽  
Market Transition ◽  
Market Model ◽  
Spot Markets ◽  
Supply Contracts ◽  
Gas Market ◽  
Returns On Investment ◽  
Gas Supply ◽  
The Eu

Current development of the European gas market uncovers several new opportunities and challenges for energy security that developed from big changes in production, transit and supply ways of natural gas to Europe. New European gas market model builds on the principles of diversification, the security of supply, interconnectivity and liberalization. Realization of the EU Third Energy Package related to a progressive shift from long-term oil-linked gas supply contracts and development of alternative gas supply sources and lines, as well as the rivalry between already established gas transit lines and the new supply lines present new challenges and require transition for the V4 countries. In this article I studied what are the new changes and challenges of the transition of V4 countries towards the EU’s energy security? To adjust to transition V4 countries should build the new infrastructure on the short-term pricing market and the ways how it will be funded. If V4 countries want to trade gas with the neighbours and transport most of the Russian gas to Europe, they need to invest into reforms of pipelines’ networks or to find other alternatives of diversification in the next decades. Returns on investment on a liberalized market with a multitude of competitors will be manageable but require serious reforms. The V4 countries will have to enter into the spot markets to efficiently trade gas. Available gas hubs in Europe are much smaller, less liquid, and mostly supplied by the same companies as the long-term traded gas hubs. This kind of markets is easy to manipulate. Therefore, it is important for the V4 countries to plan how to coordinate their national energy policies and name EU’s energy targets for the future.

LNG demand: do we have enough gas? Our gas prices? Our gas future? Somebody help!

2015 ◽  
Vol 55 (2) ◽  
pp. 494 ◽  
Author(s):  
Olumide Adisa
Keyword(s):  
East Coast ◽  
Comprehensive Analysis ◽  
Market Forces ◽  
Financial Constraint ◽  
Demand Forecast ◽  
Market Models ◽  
Term Contract ◽  
Gas Market ◽  
Gas Supply

These are interesting times for the eastern Australian gas market with Liquefied Natural Gas (LNG) projects coming online. The previously steady and long-term contract market for domestic gas supply on the east coast will be subject to market forces that are in part determined on the global stage. How will the market respond to these changes? The answer requires a comprehensive analysis of several scenarios and sensitivities around market models, as well as sophisticated modelling to capture these possibilities. This requires a tool that allows detailed modelling of the physical delivery of gas from producing fields, through pipelines and storages (including linepack) to demand points, with the capability to model any physical/financial constraint along the supply chain. The future lies in these scenarios and sensitivities. Employing a model developed through PLEXOS® gas module, this extended abstract analyses the effect of LNG on the domestic gas prices and supply in the short-to-medium and long-term. To establish any potential risk of gas shortage or particularly high prices, an analysis of the market was carried out from 2014-2023. Running several sensitivities on the demand forecast in this period, LNG effects on the market operations are examined.

VICTORIAN GAS MARKET-OPPORTUNITIES FOR PRODUCERS

1997 ◽  
Vol 37 (1) ◽  
pp. 755
Author(s):  
C.P. Demarte
Keyword(s):  
Gas Production ◽  
Market Place ◽  
Supply Contracts ◽  
Gas Industry ◽  
Market Growth ◽  
Field Development ◽  
Market Opportunities ◽  
Gas Market ◽  
Gas Supply

This paper addresses opportunities for producers in the Victorian gas market arising from the ongoing reform of the Australian gas industry. Much of the impetus of the change has occurred in Victoria but to date there has been little evidence of the benefit of market reform to producers. This is expected to change.Until recently, Esso/BHPP had a secure hold on gas production into the Victorian market. The renegotiation of their gas supply agreement with Gas and Fuel has created opportunities for limited production from new producers in the short term and significant market options in the long term.Gas marketing companies are preparing to change the way they do business. Rigid long-term gas supply contracts will be balanced with alternative arrangements with producers such as financing of field development, equity investment in projects, alliances, commodity exchanges and the use of underground gas storage and LNG.The formation of a spot market for gas will allow a transparent market place to evolve where forward physical and paper transactions can take place. Trading of gas futures and options will provide a mechanism for producers to take up any risk position that meets their corporate strategy.In the light of market growth forecasts, flexible supply arrangements and market restructure, the potential for supply of natural gas by producers into the Victorian market is considerable.

Part I Commercial Arbitration in the Energy Sector, 3 Gas Supply Transactions and Disputes

2018 ◽  
Author(s):  
Finizio Steven ◽  
Howe Michael
Keyword(s):  
Natural Gas ◽  
End Users ◽  
Liquefied Natural Gas ◽  
Transportation Infrastructure ◽  
Commercial Arbitration ◽  
High Profile ◽  
Gas Price ◽  
And Storage ◽  
Gas Supply

This chapter first describes the main transactions that occur in relation to the supply of natural gas after its exploration. In particular, it studies contracts relating to: the production of gas (including drilling contracts), the processing of gas, the transportation of gas (including in pipelines and as liquefied natural gas (LNG) by ship), the storage of gas, the sale of gas from producers to wholesalers, and the sale of gas from wholesalers to end users. The chapter then discusses disputes that typically arise in relation to those transactions, including transportation infrastructure disputes and storage disputes. It pays particular attention to disputes relating to long-term gas sale and purchase agreements (GSPAs), an important number of which have led to high-profile arbitration proceedings in recent years. The chapter, therefore, analyzes in detail the clauses typically contained in those agreements, and the issues that typically arise in arbitration — in particular, gas price reviews.

Algeria will aim to hold on to gas market share

2018 ◽  
Keyword(s):  
Natural Gas ◽  
Chief Executive ◽  
Liquefied Natural Gas ◽  
Supply Contracts ◽  
Content Type ◽  
Global Demand ◽  
Gas Market ◽  
One Year ◽  
Gas Supply

Significance Sonatrach is preparing to renegotiate most of its long-term contracts to supply natural gas by pipeline and as liquefied natural gas (LNG), as their expiry dates approach in 2019 and 2020. Ould Kaddour, who was appointed Sonatrach’s chief executive one year ago after a period of turbulence within Sonatrach, has made clear that he appreciates the need for a flexible approach in an intensely competitive market. Impacts Algeria’s hydrocarbons production is declining, but global demand for LNG in particular is rising fast. Securing new natural gas supply contracts will be vital for Algeria’s revenue prospects. Ould Kaddour’s efforts to foster better relations with international companies could be rewarded by increased investment.

The Impact of Recent Gas Market Developments on Long-Term Projections for Global Gas Supply

2010 ◽  
Vol 34 (1) ◽  
pp. 61-69 ◽  
Author(s):  
Stefan Lochner ◽  
Jan Richter
Keyword(s):  
Gas Market ◽  
The Impact ◽  
Gas Supply
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