Local gas prices set to soar as exports to Asia get under way
Historically, the east coast gas market was insulated from the rest of the world, and the domestic wholesale price was stable at about $3 to $4 a gigajoule. Now, there are buyers across Asia prepared to pay $12 or $13, even when energy markets are in turmoil as they are at the moment.
That translates to much higher domestic prices. When you account for the costs of converting the gas into LNG and shipping, it still suggests a domestic gas price of $6 to $8 in the wholesale market. That is, a 100 per cent increase from the long-term average.
So far, the NSW regulator has approved a 17.8 per cent rise in retail gas prices between 2014 and 2016, partly in response to the new export boom. Victorians face a similar jump over the next few years because its producers can also sell their gas to the north.
And these increases are just the beginning, with further significant price rises expected for the next few years.
Luckily we've got the Gippsland assets,though I expect Shelf oil ,100 percent OBL owned to be sold this quarter,as per the announcements.
Raider
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