QLD gas acreage, page-6

Dear Al,

Please re-read this farsighted quote from my original post above:

"How is the QLD government going to ensure that this gas stays in Australia given both Shell and Santos are running their giant white elephants below capacity? If nothing else, they can sell this gas locally then buy more from the wider third party market anyway. State based reservation which is a part of the wider pipeline network is worse than a bad joke given it provides a fraudulent fig leaf for the gas export cartel."

It is lazy thinking to simply wave at supply and demand and hope markets fix everything. They don't.

You refer me to Matt Stevens in the AFR.  I regard that columnist as an apologist for the status quo who couldn't reach a conclusion in a cul de sac. Reading today's waffle left me none the wiser, nor reassured the great and good are as great and good as they pretend to be. 

Let me in turn refer you to Mark Ludlow's piece on p9 of the same august publication, same date:

The fifth (ACCC) interim report into gas supply arrangements for the east coast market found there was still constraints impeding the efficient flow of gas, with pipeline tariffs remaining too high. The big LNG producers still controlled the bulk of the reserves in the market.

‘The long-term gas supply outlook in the east coast gas market remains uncertain and heavily influenced by the LNG producers that control the bulk of the reserves and resources in the market,’’ the report found.‘‘There are significant uncontracted 2P [proved plus probable] reserves in the Surat and Bowen basins in Queensland. The timing and development of these reserves is critical for the east coast gas market. It will depend on a number of factors, including the performance of the coal seam gas wells, production costs, gas prices and, crucially, choices made by the LNG producers on how much gas to supply into the domestic and export markets.’’

_____

Allocating an Authority to Prospect over some Surat acreage to CTP will increase domestic supply if it finds commercial gas. The same cannot be said of Shell/Santos and their underemployed chillers.

Best wishes,

Ash

ps.  Your jibe about my smoking something is unworthy and uncalled for.