Pricing prospects for global LNG and Australian gas markets

2014 ◽  
Vol 54 (2) ◽  
pp. 490
Author(s):  
Fiona Poynter
Keyword(s):  
East Coast ◽  
Supply And Demand ◽  
Supply Contracts ◽  
Short Term ◽  
Gas Industry ◽  
The Us ◽  
Gas Markets ◽  
Gas Market ◽  
Market Needs ◽  
Index Formulas

Global LNG pricing outlook Liquidity in the global LNG spot market is increasing and the industry is seeking price diversification in its supply contracts. The rationale for oil linkage is being challenged. Short-term trade now accounts for a quarter of the total market, and the US’ Henry Hub, the UK’s NBP, and global LNG spot indices are all used in LNG price indexation. Growth in LNG supplies, short-term trade, and operational flexibility will drive global price connectivity and increase transparency. The US will begin exporting LNG, tightening the price differential between Atlantic and Pacific basins. The LNG industry will continue to question the validity of oil-price linkage as it seeks a reliable reference capable of reflecting supply and demand fundamentals in the gas markets themselves. It is, however, important to recognise that gas-to-gas pricing will not automatically deliver cheaper LNG than equivalent oil-index formulas. East coast Australia gas pricing outlook Dynamics in Australian east coast gas markets are changing rapidly, with LNG at the heart of this revolution. The east coast gas industry seeks a deeper, more liquid and transparent market, while looking to international gas hubs for lessons in boosting market efficiency. The industry must address challenges such as gas storage and pipeline capacity if it is to have the flexibility needed to build a vibrant market. Oil-indexed LNG netback pricing is starting to work its way into east coast gas supply contracts; however, as the European gas industry moves away from oil indexation, Australia’s domestic gas market needs to look at alternative pricing structures.

scholarly journals Gas markets – a bridge too far?

2019 ◽  
Vol 59 (2) ◽  
pp. 520
Author(s):  
Graeme Bethune ◽  
Rick Wilkinson
Keyword(s):  
East Coast ◽  
Supply And Demand ◽  
Market Potential ◽  
Energy Market ◽  
Supply Contracts ◽  
Sourcing Strategies ◽  
New Energy ◽  
Gas Markets ◽  
Gas Market ◽  
Gas Supply

The energy market is becoming more globalised and renewables are changing the supply and demand balance. Gas has been suggested as the bridging fuel to the new energy world – but is it a bridge too far? This presentation examines the global gas context and its impact on the Australian east coast gas markets, trends in energy supply options and sign posts for new directions. When the first liquefied natural gas (LNG) train started on Curtis Island, the gas producers had access to more than just the domestic market. The new overseas markets are also interconnected, so the Henry Hub, Brent oil and Chinese gas demand all have an influence on Australia’s east coast gas market. Potential LNG import terminals and net back pricing are changing the domestic gas market. The energy market is moving to renewables. This is not just an anomaly that will correct itself, but is based on lower renewable costs and distribution challenges. Moving relatively small amounts of energy long distances is a major challenge for Australia. Infrastructure, market hubs and sourcing strategies need to compensate for these challenges, and investment is needed to keep pace with the changes. Capital is a global commodity seeking the optimum return for the risk, but unconventionals, such as coal seam gas, are capital hungry. Government policies and support can be the key determinant for not only new investment but sustaining investment to meet existing gas supply contracts. Smart gas buyers will need to be agile and use deeper portfolio approaches for gas supply.

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.

Jemena's perspective on Australian gas market dynamics: a vision of a fiercely competitive market facilitated by an interconnected supply chain

2017 ◽  
Vol 57 (2) ◽  
pp. 462
Author(s):  
David Green ◽  
Thomas Allen
Keyword(s):  
East Coast ◽  
Price Volatility ◽  
Gas Pipeline ◽  
Growth Strategy ◽  
Valuable Insight ◽  
Gas Industry ◽  
The Usa ◽  
Gas Market ◽  
The Right ◽  
Gas Price

As pipeliners, we take a long-term view of the transformative opportunities facing the Australian gas industry. We believe a market-driven approach will overcome the current challenges around gas price volatility and supply constraints by further developing the missing links that will enable genuine connectedness, greater flexibility and operating synergies across a national gas transportation grid – one that can deliver gas where it is needed most and at the right price. Looking at mature gas trading environments like the USA provides some aspirational direction in terms of the fluidity of the gas trading environment, where pricing is more dynamic. However, the past and present development opportunities within our own backyard also provide valuable insight. Building the Eastern Gas Pipeline transformed the east coast gas market by introducing a competitive alternative for gas transportation into Sydney and upstream competition between basins. A similar market-led opportunity exists today to build infrastructure connecting Northern Territory gas producers to east coast markets – introducing a competitive alternative for gas transportation and upstream competition between the Beetaloo/McArthur basins and the Surat/Bowen basins. Winning the right to build the Northern Gas Pipeline was an important first step in Jemena realising this vision. Current regulatory discussions would not be relevant if the industry can shape its own market. Jemena’s northern Australia growth strategy could be the catalyst to resolving these challenges and avoiding further gas constraints or Australian Competition and Consumer Commission interventions seeking to address theoretical issues, rather than solving actual market challenges.

The east coast gas market explained: analysis of the gas market supply and demand dynamics

2018 ◽  
Vol 58 (1) ◽  
pp. 11
Author(s):  
Joshua Stabler
Keyword(s):  
Structural Change ◽  
Natural Gas ◽  
Government Policy ◽  
Electricity Market ◽  
East Coast ◽  
Supply And Demand ◽  
Market Transition ◽  
Liquefied Natural Gas ◽  
Economic Consideration ◽  
Gas Market

The Australian east coast gas market is experiencing arguably the most disruptive structural change since its inception, with the completion of the 25.4 mtpa Curtis Island Liquefied Natural Gas (LNG) facilities and the introduction of a fourth pillar to the market for domestic gas. However, this disruption was not in isolation and coincided with substitutional interactions with the electricity market already dealing with transition. This report develops context for the natural gas market, establishes the four major avenues of markets and then investigates eight fundamental supply and demand dynamics that are influencing the market in an interconnected fashion. The report concludes that all participants of the gas market must address the multiple dynamic drivers including economic consideration, government policy and regulatory engagement to avoid disorderly market transition.

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.

Building liquidity and transparency in the Australian east coast gas and global LNG markets

2015 ◽  
Vol 55 (2) ◽  
pp. 419
Author(s):  
Fiona Poynter
Keyword(s):  
Reference Point ◽  
East Coast ◽  
Spot Markets ◽  
Well Drilling ◽  
On Line ◽  
Forward Prices ◽  
Key Drivers ◽  
Gas Markets ◽  
Gas Market ◽  
Southeast Queensland

The Australian natural gas market is undergoing a dramatic change. Queensland will start LNG production and exports at the end of this year, and this is already having an effect on the east coast’s domestic gas market. LNG ramp-up gas supplies are now exerting downwards pressure on forward prices in Queensland and to some extent in other east Australian states. LNG plant operators are ramping-up well drilling and production to ensure the smooth processing of gas feedstock for liquefaction. But the availability of this gas for the domestic market will start to fall when the first LNG plant comes on line at the end of 2014. The Argus Wallumbilla index (AWX), for month-ahead gas delivery in southeast Queensland, usefully illustrates the changing dynamics of the Australian east coast gas market and provides the industry a transparent reference point on which to base a transaction. This extended abstract provides expert insights into the interplay between the Australian LNG export and east coast domestic gas markets, as well as the pricing implications and outlook for the global LNG markets. It also aims to answer the following questions: How will liquidity develop in the Australian east coast domestic spot gas market? How will the east coast LNG spot supply picture evolve? What are the key drivers in the global LNG spot markets? How will Henry Hub pricing impact Australian LNG pricing?

Evaluating the sources and impact of new east coast gas supply

2020 ◽  
Vol 60 (2) ◽  
pp. 464
Author(s):  
Daniel C. Levy
Keyword(s):  
East Coast ◽  
Average Duration ◽  
Medium Term ◽  
Viable Option ◽  
Short Term ◽  
Technical Evaluation ◽  
Gas Market ◽  
Well Level ◽  
Gas Supply

Rystad Energy has conducted a well level supply side study for the Australian east coast gas market, quantifying the widely expected supply shortfall and its timing. This paper presents these findings, along with an economic and technical evaluation of new sources of supply relief and their potential impacts on the market balance. The study suggests the east coast has adequate gas supply to meet demand until 2024, with an average excess of 73 billion cubic feet (Bcf) per annum over this period. However, in 2025 the market will shift to under-supply, starting at 93 Bcf in 2025 and increasing to over half a trillion cubic feet by 2030. Sufficient supply in the short term does not warrant complacency. With the average duration between discovery and first gas for the region being 7.1 years since 1990, even if new (traditional) supply is discovered in 2020, the market will still be undersupplied for at least 3 years. We have identified the four most likely sources of supply relief for the market, each with their own merits, difficulties and development timelines. These new sources include the Beetaloo Sub-basin shales of the Northern Territory, undeveloped coal seam gas acreage, electrifying liquefied natural gas (LNG) export facilities to preserve in-field usage, and finally, LNG importation. A combination of at least two of these sources is required to balance the east coast gas market to 2030. Of the options, LNG importation is the most viable to stave off undersupply in the medium term (3 to 7 years). While Beetaloo Sub-basin shale gas appears the most viable option for secure, long-term supply relief.

Asian gas market set for fundamental change

2016 ◽  
Keyword(s):  
Natural Gas ◽  
South Korea ◽  
Liquefied Natural Gas ◽  
Fundamental Change ◽  
Short Term ◽  
Content Type ◽  
Demand Growth ◽  
Gas Markets ◽  
Gas Market ◽  
Liquefied Gas

Subject Asian liquefied gas markets. Significance India has overtaken South Korea as the second-largest buyer of spot and short-term cargoes of liquefied natural gas (LNG), with the percentage of its LNG imports from such cargoes -- based on contracts of four years or less -- rising by 45% in 2015 over 2014. With global gas prices likely to remain low through to 2020, transforming what was a seller's market only two years ago into a buyer's market, a structural shift is underway in the demand for imported LNG in South and East Asia. Impacts The pipeline of new LNG supplies that will be added to the market in the next few years will ensure a buyer's market through to 2020. A persistently low global price could see Asian buyers opting for smaller volumes and shorter contracts for LNG imports. Sustainability of demand growth in new markets such as India will depend on the speed of expansion of infrastructure.

scholarly journals Tendencies and potential of formation of common gas market in EEU

2019 ◽  
Vol 27 (4) ◽  
pp. 693-705
Author(s):  
Marina F. Tkachenko ◽  
Nelya I. Allaiarova
Keyword(s):  
Socioeconomic Development ◽  
Member States ◽  
Gas Industry ◽  
Economic Space ◽  
Existing Problems ◽  
The Common ◽  
Gas Markets ◽  
Gas Market ◽  
Relationship Of ◽  
The Relationship

The article discusses the relationship of the EEU member states in the gas sector. Based on the analysis of existing problems and contradictions, as well as the agreements reached in the EEU, an assessment is given of the prospects for the formation of a common gas market within the framework of a single economic space. The formation of a common gas market is seen as the key to ensuring its energy security and harmonious socioeconomic development of both suppliers and consumers of gas in EEU. The lack of a price model of the gas market, heterogeneity and incompatibility of the potential of national gas markets, the complexity of the unification of the rules of the market, export problems and other equally important issues determine the relevance of the study of the functioning and development of gas markets of the EEU member states. The aim of the work is to analyze and identify the main problems affecting the development of the gas industry in EEU. The results obtained in the course of the study suggest that the functioning of the common gas market of the EEU is possible in the conditions of achieving institutional homogeneity of national gas markets.

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