Queensland CBM to LNG projects could see gas prices surge
Rush for gas reserves for Queensland’s CBM-to-LNG projects "may triple Australian gas prices"
Santos said that strong overseas appetite for LNG and Australia’s transition to a low-carbon economy – with carbon pricing and increased gas-fired power generation – has triggered a permanent structural shift in the east-coast gas market. Prices will trend towards oil-linked parity of about A$6 ($5.7) to A$9 a gigajoule (GJ), Santos’s vice-president of eastern Australia, James Baulderstone, claimed. This compares with east-coast prices today of between A$3 and A$4/GJ, which is low by international and even western Australian standards.
Although the long-term price gains mirror trends in Western Australia (WA) – where domestic gas prices have been two to three times those in the east, and more recently linked to oil prices as conventional LNG-export projects compete for supply – in WA, 15% of any gas project’s production is reserved for domestic markets.