Gasoline costs in Australia: Gladstone coal seam gasoline LNG exports to boost Australian gasoline value to $12/GJ, 2012 to 2040?
Updated on January 14, 2014 claudiafox extra Precise common Southeast Australia every day weighted prices by quarter – falling since begin of pool
Oil-value-linked gas worth; the fuel-sellers wish-checklist.
Oil value in $US Oil linked fuel value
$sixty five $5GJ
$eighty five $7GJ
This would make the current gas price over $10GJ as the OPEC reported world price per barrel was April 2012 at $118.18 and March 2012 to $122.97. The yr-to-date price $117.Sixty six. The gas-worth-curve: down in the USA and down in Australia
Australia gas investors wish to hyperlink Australian home gasoline price in the three Australian gas markets to the oil value; for instance:
if the oil value is US $105 a barrel; then
investors need the gasoline price at $10 a GJ;
in brief, gas to fluctuate as oil worth varies.
Price affect of oil-linked domestic gas contracts: This could increase recession-affect of excessive oil value on Australian consumers, at a acquire to power traders; and current a achieve to State and Federal Governments, where vitality royalties are revenue-linked.
The financial downside: A home gasoline value, linked to oil price – (if oil value stays high); may
remove competitors between gasoline suppliers;
cut back consumer bargaining power;
transfer earnings to traders;
increase home recession impacts of high oil price.
So far, one Australia contract has appeared on the oil-linked price 9 believed close to $10 GJ); and but
coal seam fuel was reported – as produced – in Queensland;
for as low as $0.30c/GJ and contracted elsewhere, at $0.95/GJ.
Origin LNG sells to QCLNG at oil-linked value: The first domestic gasoline contract at LNG value was made in May 2012 when Origin contracted to sell CSG to an LNG rival, at oil-linked LNG export costs.
Competitors for gas and for expert oil and gasoline employees: The rationale the rival – QCLNG – paid, was it had LNG contracts it had to meet and was in need of coal seam fuel. Local landholders had joined the Lock the Gate motion. Even the scone-making Country Women’s Affiliation had marched in the road – the primary time in 90 years – to protest land impact of coal seam gasoline drilling. The growth had also created a excessive demand for oil and fuel and engineering experts; wages have been excessive, rents stupendous – a form of local inflation – as LNG and coal seam fuel corporations and coal mines competed for high paid workers.
2012 world commodity prices show coal value down, US gasoline value down, world oil worth up
Worldwide gasoline prices
US gas value down however Australian gasoline price up
As US home gasoline costs fall, with the arrival of extra domestic shale gasoline and coal seam gas, in Australia gasoline price could rise. The US Henry Hub worth for example has fallen about 15% a month on average for the final four months – however the oil worth rose. If that US fuel price – was linked to the the oil price – US gasoline worth can be 4 times increased, and rising – and domestic gas value would not reply to competition.
What Australian traders want: If gasoline-provide investors lobby-efforts succeed, Australia’s domestic gasoline value – for electricity generation, city and industrial gas – might rise to match LNG export price. The winners here, power traders. Lots of blokes will get great bonus payments as share costs rise with the fuel price.
All gas priced like oil – that’s the plan: Vitality traders lobbied-laborious for a world gasoline price linked to oil price. For example, Origin Vitality’s huge dream was that Australian domestic gasoline worth would rise to the same stage as LNG contracts – that is, get linked to oil price fluctuations.
Market operator forecast fuel value $10/GJ at 2030; however actual curve at 2012 much decrease, between $0 and $5Gj
The wholesale gas value curve Australian fuel sellers need
Australia gasoline value curve for the South East to March 2012
Sydney, Adelaide and Melbourne spot fuel costs for the past two years
When the new NSW market opened, worth fell; In the primary month wholesale gas costs at the Sydney hub fell from just below $4.5/GJ to $2.Three/GJ. At the identical time, wholesale gasoline costs were $2.Forty seven/GJ in Victoria and $three.61/GJ in South Australia.
For this chart, above;
Sydney, Adelaide and Brisbane information are weekly averages of the ex ante day by day price in every hub;
Melbourne prices are estimated weekly averages for the metropolitan area, primarily based on Victorian wholesale spot gasoline costs, plus the present transmission withdrawal tariff for the Melbourne metropolitan zones.
Sydney, Adelaide and Brisbane prices are aligned.
Victoria price was up: Every day Melbourne metropolitan gasoline costs for the 9 months to 31 March 2012 averaged $3.37 per gigajoule, compared with $2.48 within the corresponding period final 12 months.
Within the brief time period trading market, costs for the 9 months to 31 March 2012 averaged:
$Three.08 per gigajoule in Sydney (in contrast with $2.59 in the corresponding period last year); and
$three.65 per gigajoule in Adelaide (compared to $2.91 per).
Brisbane costs averaged $3.Thirteen per gigajoule in the first 4 months of market operation from 1 December 2011 to 31 March 2012.
Australian power flow diagram; two new LNG exports trains to double gasoline demand in SE Australia
Australian Treasury forecast Australia gasoline value curve to 2050; information influenced by clever lobbying? Implies oil-linked domestic gas price
How Australia’s domestic gas worth might rise
Six power market adjustments could increase gas price;
LNG exports from 2014; from Queensland and Western Australia: and
carbon worth from 2012;
Center East oil move constraints and excessive oil price by to 2017;
pure catastrophe impression on world power flows. For instance, March Japan 2011 earthquake and tsunami melt down of 4 nuclear plants. This increases LNG demand. Notice that 50 Japan nuclear plants are now closed after public outrage about safety. No nuclear reactor is on-line. The summer season season lies forward and blackouts possible in high temps. Japan has an unusual commerce deficit. It has a high need for LNG and coal;
lobbying by gas sellers to vary market expectation in sellers’ favor – for example by influence of media and Federal and State Treasury modeling presumptions and inputs;
mergers unsuccessfully opposed by the Australian Competitors and Client Fee. For example gas transmission rates might rise in NSW, SA and Queensland if APA will get permission to takeover the Westpac Bank-owned Hastings. The three SE Australia pipeline homeowners are Jemena, Hastings and APA.
Gasoline value rise development in NSW?
The ACCC has warned Sydney, NSW gasoline costs could rise if APA was allowed to own the Moomba-Sydney pipeline. NSW, the State where the most individuals stay in Australia, wants extra gas, says its Vitality Minister, Chris Hartcher. In the new gas pool, for example, in the first week of February 2012, Sydney industrial fuel pool value rose, to $4GJ, higher than different regions. Nonetheless coal seam gasoline was reported as produced – in Queensland – for as low as $0.30c/GJ and contracted at $zero.Ninety five/GJ.
NSW a fuel importer: NSW imports from Queensland and South Australia.
What NSW gas-fuelled electricity generators pay for gas
Delivered natural fuel prices in 2009-10 for NSW gasoline-fuelled electricity generators was a range of:
- $Three.80, $4.19, $6.22 and $7.Forty two per gigajoule (GJ);
- for Tallawarra, Smithfield, Uranquinty and Colongra stations, respectively;
- delivered pure fuel price in Victoria was decrease than NSW at $three.87-$5 per GJ. ;
- prices for South Australia were between Victoria and NSW at $three.98-$6.61 per GJ. ;
- Queensland, nevertheless, which has each.
natural gas; $Four.70-$6.67 per GJ, as compared to; had
delivered fuel prices for CSG based power plants at $0.Ninety five-$4.24 per GJ.
IP view: Impact of LNG export start, carbon value, and better gas worth on wholesale electricity value as fuel replaces coal
Wholesale gas supply and demand in South East Australia at 24 January 2012
Forecast wholesale fuel worth for south east Australia
Two forecasts of Australian gasoline prices:
The vitality market operator (AEMO) forecast fuel worth $10/GJ at 2030, and
Treasury forecast $12/GJ by 2040
Treasury forecast: The Treasury gasoline price knowledge and the AEMO knowledge both coated Western Australia, Queensland, NSW, ACT, Victoria, South Australia, and Tasmania. The two Australian forecasts were from:
an Australia Federal government research of the affect on carbon worth on electricity price in Australian markets from 2012; and the contribution of gasoline price to that change; and
an Australian Energy Market Operator (AEMO) commissioned report of forecast gasoline prices for Australia’s south east grid.
Coal Seam Fuel
What the Frack? The whole lot you have to know about coal seam gasoline Purchase Now Coal seam gas compressed for export as LNG
The Commonwealth Treasury forecasts present a noticeable bump within the Queensland gas value around 2015.
That represents the impact of 4 dedicated LNG trains at the port of Gladstone, Queensland; the first export of LNG from Queensland.
LNG exports increase Australian home gasoline worth: The situations present LNG exports elevate the fuel value in the domestic Queensland market, as giant volumes of coal seam gasoline movement to satisfy the LNG export contracts with China, Korea and Japan. Till that time, ‘ramp-up” gasoline keeps south east Australia gasoline worth low; and also could lower wholesale electricity prices.
Gas map for Queensland reveals fuel circulate directions and volumes 14 February 2012
First Gladstone LNG export 2014?
The move of coal seam gasoline to LNG export constrains supply to domestic use; primarily electricity generation.
World worth expected from 2020: The fuel prices for the standard LNG scenario derived from the model were input into by NEM region until the 2020 import parity date.
So within the Treasury mannequin, eastern Australian gasoline costs were modified by the year on yr change of the world gasoline value.
“The graph shows the final form of gas prices used for new contracts in japanese Australia for the core policy case – a $20 tonne carbon worth.
The variation in fuel value between the carbon worth situations was at most 15per cent, so these gasoline prices are fairly representative of the fuel value profile for all situations”.
LNG exports from Gladstone, Queensland forecast to boost home gasoline worth
“lat”:-23.849001,”lng”:151.263,”zoom”:Eleven,”mapType”:”ROADMAP”,”markers”: $6/GJ and $9/GJ for brand new base load contracts
This data covers SE and SW Australia: Gasoline costs in the Western Australia market – the WEM – will not be broadly published and are sometimes confidential. The model assumed that prices vary between $6/GJ and $9/GJ for new base load contracts.
Australian home gasoline costs in 2012 above world costs: To balance the info – not all forecasts come to move. LNG parity for gasoline is on the wish record of the gasoline suppliers. They have promoted this idea of “LNG Parity” in all kinds of forums for the past four years.
Treasury views might reflect provider bias: Present contracts are at assumed contract value ranges. The prices are assumed to vary consistent with the Treasury’s forecasts of world vitality costs. The Australian gasoline business was keen for Australian home costs to match world prices; but prices had been beneath world prices in 2012. This was due to the very excessive volume of coal seam gasoline, marketed on shorter time period contacts to gas generators, the prime demand-driver for, gasoline in Australia.
Australia carbon value raises wholesale electricity value
Government to pay coal generation to close; this may raise domestic gasoline demand and worth
Australia has set a low fastened carbon worth until 2015; and after that Australian polluters may import overseas credits.
These could have a lower worth. These low carbon prices will in all probability enable coal to fuel power stations for a few years. Energy stations which own coal mines – mine-mouth coal, will retain low prices. The Australian authorities was to pay coal energy plants to shut by 2016. Coal plant owners have been to bid for the payouts. To succeed, a bid for closure had to show up in AEMO modeling as creating “no blackouts” in the region.
This suggests coal plant homeowners would rapidly plan new gasoline plant, funded by coal plant closure compensation. This is able to increase gas demand and price.
Based on a beginning carbon value of $20/CO2-e from 2012; The carbon price was set to rise, within the model – at four per cent a 12 months.
The best way to do deals in the Power Market
Energy Buying and selling margin:0px !essential;” /> Carbon trading
Pricing Carbon: The European Union Emissions Buying and selling Scheme Buy Now Australian Energy Market Operator (AEMO) report of forecast gasoline prices for the south east grid.
The Australian Vitality Market Operator (AEMO) had commissioned a report of forecast gas prices for the south east grid.
Low domestic gas worth for electricity generation: AEMO’s advisors argued electricity buyers could depend on low price gasoline for twenty years; and costs could traits decrease on account of lower costs of equity.
Moomba Hub proxy for technology gasoline price: Electricity technology gas price scenarios commissioned by the Australian Energy Market Operator (AEMO) used the central Australia Moomba Hub because the proxy for electricity technology fuel price. All eventualities gave the same gas price curve for the coal seam gas which flows to Moomba from Queensland.
Identical price for all runs: The modelling confirmed little value sensitivity to the seven gasoline powered generation gas demand sensitivity runs.
The Moomba hub gas price various solely marginally between the 7 runs.
massive quantity of (coal seam fuel) reserves available; and
average variations in provide costs between the reserve courses (characterised by 1P, 2P, 3P, contingent and exploration sort reserves).
In different words there was ample gas and the cost of supply is pretty constant over the known reserves;
volumes of gasoline contained in these reserves are giant in comparison with the difference in gas powered technology demand between all the runs; and
influence of LNG netback prices which were independent of the prices of manufacturing.
LNG: Gas for a Altering World―A Nontechnical Information Buy Now LNG and Oil Worth
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