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They would get a higher price domestically than selling to GLNG,...

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  1. 5,334 Posts.
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    They would get a higher price domestically than selling to GLNG, definitely. A much higher price. The upstream gas price to GLNG will be oil-linked and with oil at $50ish, I doubt they would be getting more than about A$5/GJ.

    GLNG would also get more selling domestically, particularly when you add liquefaction costs.

    But as discussed in the previous thread, the situation is complicated by the contracts situation (if you sell gas domestically you need to make it up with spot LNG cargoes which you may make a loss on), the fact some partners have offtake contracts so the GLNG partners may not all be aligned, and the fact that you still need to pay off the cost of the second train regardless of whether you are using it or not, which means in effect you need to factor in Train 2 interest and D&A costs to any gas diverted to domestic contracts.

    But at the moment the price differential between the upstream GLNG price and the domestic price is probably high enough that it does make sense. Particularly when they are selling into SA to prevent another round of blackouts this season - they could just about name their price, and the SA taxpayer will be footing the bill.
 
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