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

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.

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Earning community trust to operate – Northern Gas Pipeline

The APPEA Journal ◽

10.1071/aj17168 ◽

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.

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Pricing prospects for global LNG and Australian gas markets

The APPEA Journal ◽

10.1071/aj13063 ◽

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.

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State of the east coast gas industry

The APPEA Journal ◽

10.1071/aj18310 ◽

2019 ◽

Vol 59 (3) ◽

Author(s):

Rod Sims

Keyword(s):

East Coast ◽

Gas Industry ◽

The Right

There is not an abstract available for this presentation. To view the video, click the link on the right.

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Panel discussion: Staying the course – east coast gas market challenges and opportunities

The APPEA Journal ◽

10.1071/aj18323 ◽

2019 ◽

Vol 59 (3) ◽

Author(s):

Ticky Fullerton ◽

Matt Canavan ◽

Nathan Fay ◽

Rod Sims ◽

Kevin Gallagher ◽

...

Keyword(s):

East Coast ◽

Panel Discussion ◽

Challenges And Opportunities ◽

Gas Market ◽

The Right

There is not an abstract available for this discussion. To view the video, click the link on the right.

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Modeling natural gas price volatility: The case of the UK gas market

Energy ◽

10.1016/j.energy.2014.05.016 ◽

2014 ◽

Vol 72 ◽

pp. 126-134 ◽

Cited By ~ 25

Author(s):

Harm van Goor ◽

Bert Scholtens

Keyword(s):

Natural Gas ◽

Price Volatility ◽

Gas Market ◽

The Uk ◽

Gas Price

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East coast gas: resource potential at different gas price scenarios (Part 2: commercialisation of unconventional gas resources)

The APPEA Journal ◽

10.1071/aj18199 ◽

2019 ◽

Vol 59 (2) ◽

pp. 542

Author(s):

Joe Collins ◽

Ian Cockerill ◽

Zain Rasheed

Keyword(s):

East Coast ◽

Economic Cost ◽

Gas Production ◽

Unconventional Gas ◽

Market Experience ◽

The Usa ◽

Gas Market ◽

To Come ◽

Unconventional Gas Development ◽

Supply Costs

Rising gas prices in the eastern Australian gas market, as well as forecast supply shortages in years to come, are driving speculation about LNG import requirements for the market. There are significant similarities with the gas market experience in the USA in the early 2000s which led to the construction of many LNG import terminals, the parallel rise of unconventional gas production and the subsequent mothballing of the LNG import facilities at huge economic cost. A comprehensive east coast gas market study has been carried out based on the 2P reserves positions for domestic gas producers. This data has been paired with a range of gas demand forecasts to identify the probable supply gap on the east coast over the next 10 years. A market response to the high gas pricing in the form of new developments is already underway. In a separate paper (Part 1) all potential domestic sources of unconventional gas to fill that gap were analysed to determine likely gas supply rates, development schedules and breakeven supply costs for each of the major demand centres. This paper (Part 2) illustrates the required gas prices to drive unconventional gas development in Australia, the subsequent scale of new unconventional gas supplies to the forecast gaps in the market and describes how those developments can reverse the trend of rising prices over time.

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BASS STRAIT GAS TO NEW SOUTH WALES—THE COMMERCIALISATION OF THE EASTERN GAS PIPELINE

The APPEA Journal ◽

10.1071/aj00048 ◽

2001 ◽

Vol 41 (1) ◽

pp. 787

Author(s):

D.A.J. Biggs

Keyword(s):

New South ◽

New South Wales ◽

Gas Pipeline ◽

Market Reform ◽

Gas Industry ◽

Regulatory Issues ◽

South Wales ◽

Access Code ◽

Gas Market ◽

Market Fundamentals

The Eastern Gas Pipeline is an 18-inch diameter pipeline running from Longford in Victoria to Horsley Park in Sydney, New South Wales—a distance of some 795 kms (Fig. 1).While the construction of the pipeline in approximately 12 months is a considerable achievement, it took more than six years to establish the regulatory and market fundamentals to allow construction to commence. The commercialisation of the Eastern Gas Pipeline took place during a period in which the Australian gas industry was subject to much regulatory and market reform. The project provided some impetus for that reform, particularly in NSW.The pipeline was the first interstate gas pipeline to be committed under the National Gas Pipeline Access Code. It also represented the means by which significant quantities of Bass Strait gas could be supplied to the NSW gas market for the first time.This paper discusses the variety of commercial and regulatory issues that needed to be resolved to allow the Eastern Gas Pipeline to become a reality.

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