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?

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.

scholarly journals Modeling Post-Liberalized European Gas Market Concentration—A Game Theory Perspective

Forecasting ◽  
2020 ◽  
Vol 3 (1) ◽  
pp. 1-16
Author(s):  
Hassan Hamie ◽  
Anis Hoayek ◽  
Hans Auer
Keyword(s):  
Game Theory ◽  
Statistical Tests ◽  
Parametric Method ◽  
Linear Complementarity Problems ◽  
Market Concentration ◽  
Cournot Equilibrium ◽  
Gas Markets ◽  
Gas Market ◽  
Equilibrium Test ◽  
Non Parametric

The question of whether the liberalization of the gas industry has led to less concentrated markets has attracted much interest among the scientific community. Classical mathematical regression tools, statistical tests, and optimization equilibrium problems, more precisely non-linear complementarity problems, were used to model European gas markets and their effect on prices. In this research, the parametric and nonparametric game theory methods are employed to study the effect of the market concentration on gas prices. The parametric method takes into account the classical Cournot equilibrium test, with assumptions on cost and demand functions. However, the non-parametric method does not make any prior assumptions, a factor that allows greater freedom in modeling. The results of the parametric method demonstrate that the gas suppliers’ behavior in Austria and The Netherlands gas markets follows the Nash–Cournot equilibrium, where companies act rationally to maximize their payoffs. The non-parametric approach validates the fact that suppliers in both markets follow the same behavior even though one market is more liquid than the other. Interestingly, our findings also suggest that some of the gas suppliers maximize their ‘utility function’ not by only relying on profit, but also on some type of non-profit objective, and possibly collusive behavior.

2014 PESA production and development review

2015 ◽  
Vol 55 (1) ◽  
pp. 177
Author(s):  
Steve Henzell ◽  
Steve Cooper
Keyword(s):  
Crude Oil ◽  
East Coast ◽  
Commodity Price ◽  
Transmission System ◽  
Oil Price ◽  
Secondary Development ◽  
Crude Oil Production ◽  
Small Fields ◽  
On Line ◽  
Timor Sea

2014 was the penultimate year for many of the massive multi-year LNG development projects. These projects will lift Australia’s LNG capacity by more than 250% from present levels. The first train of the Queensland Curtis LNG project came on-line in late 2014. Exports are expected to commence from a further three LNG projects (APLNG, Gladstone LNG and Gorgon) in 2015. The ramp-up in gas demand on the east coast of Australia is spurring secondary development. A pipeline link has been proposed from the NT’s gas transmission system to connect to the east coast gas transmission system to allow gas from the Timor Sea to be fed into the east coast market and to the Queensland LNG projects. 2014 was a quiet year for new oil developments. Offshore, the Balnaves FPSO development was brought on-line. Onshore, the operators of the Cooper western flank continued to discover and develop a series of small fields. These small developments and better performance from some existing fields were able to offset natural reservoir decline elsewhere, leading to an overall increase in crude oil production of approximately 4% from the previous year. The second half of 2014 was characterised by a decline in crude oil price from more than $100/BBL to under $60/BBL by year-end. For many LNG contracts, LNG price is linked to oil price; existing LNG developments are well progressed and are unlikely to be curtailed by the low commodity price, but future developments are already being slowed or stopped.

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.

Earning community trust to operate – Northern Gas Pipeline

2018 ◽  
Vol 58 (2) ◽  
pp. 609
Author(s):  
Jonathan Spink
Keyword(s):  
East Coast ◽  
Training And Development ◽  
Gas Pipeline ◽  
Compressor Station ◽  
Land Access ◽  
Gas Processing ◽  
The Social ◽  
Social Support Services ◽  
Gas Market ◽  
Base Load

The Northern Gas Pipeline (NGP), is a 622-km gas pipeline in outback Australia that will connect gas reserves in the Northern Territory to the east coast gas market. With the current east coast gas crisis and continuing pressure to reduce coal-fired base load power, this project creates a new market to deliver additional gas to the east coast. The project includes the construction of the pipeline and two compressor station facilities at the start and end of the line: the Phillip Creek Compressor Station, which includes gas processing infrastructure, and the Mount Isa Compressor Station. The AU$800 million project began in November 2015 and first gas is scheduled to flow in late 2018. The bid to contract the pipeline included a range of local and Indigenous commitments that would maximise local participation in the project, ensuring that the social licence to achieve land access and government approvals was realised while keeping to a very aggressive timetable. Jemena worked closely with local businesses, communities and Traditional Owners to provide training and development opportunities, employment and other social support services. This approach has meant that the project is on track to deliver this nationally significant gas pipeline under budget, ahead of the contractual schedule requirement, while meeting or exceeding all local obligations and commitments.

scholarly journals Exploring the Influence of Price and Convenience on Perceived Usefulness of On-line Banking within the TAM Framework: A Cross National (Canada and Spain) Decision Model

2013 ◽  
Vol 1 (2) ◽  
pp. 342 ◽  
Author(s):  
Jean-Pierre Maxime Lévy Mangin ◽  
Mario Martínez Guerrero ◽  
Normand Bourgault ◽  
José Manuel Ortega Egea
Keyword(s):  
Technology Acceptance ◽  
Technology Acceptance Model ◽  
Latent Variables ◽  
Marketing Channels ◽  
Perceived Usefulness ◽  
Future Research ◽  
On Line ◽  
Key Drivers ◽  
Acceptance Model ◽  
Cross National

<p><em>Nowadays, the Internet is a powerful mean to complement the traditional marketing channels used by banks. Based on the Technology Acceptance Model, this paper explores the importance of two external latent variables—‘Price’ and ‘Convenience’ —as antecedents of ‘Perceived Usefulness’ and consumer acceptance of on-line banking in a Canadian and Spanish environment; the results highlight the predictive power and accuracy of the model cross-nationally. In fact, the findings were quite similar in the Canadian and Spanish samples, and stress that ‘Perceived Usefulness’ and ‘Attitude’ are the key drivers of the consumers’ on-line banking acceptance. Conclusions and recommendations for future research are also provided.</em></p>

Gas Market Developments in Western Europe

1988 ◽  
Vol 6 (4-5) ◽  
pp. 342-360 ◽  
Author(s):  
Peter R. Odell
Keyword(s):  
Soviet Union ◽  
Natural Gas ◽  
North Sea ◽  
Western Europe ◽  
Domestic Demand ◽  
Energy Market ◽  
Coal Gas ◽  
The Soviet Union ◽  
Gas Markets ◽  
Gas Market

Prospects for the European gas markets are excellent because North Sea reserves are extensive, the distance to markets small and the latent domestic demand to replace uneconomic coal gas. Nevertheless, expansion in the gas trade has been modest because the industry has not been sufficiently assertive to dispel misconceptions about the adequecy of supply and to deal with pressures from competing energy interests. Increasing rivalry between suppliers can only lead to greater sales effort and the creation of demand, particularly for non-traditional end-users. Expansion of European gas markets could be drastically increased through greater efforts by the Soviet Union to export. This could only happen with price competitiveness that would significantly expand gas markets. There is every reason to expect that the natural gas share of the European energy market would continue to grow until it was the single most important component of western Europe's supply of energy.

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.

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