From The Australian. Guess we fit in the term 'others' SLIDING...

From The Australian. Guess we fit in the term 'others'

SLIDING oil prices and domestic gas demand are set to put a lid on Australian east coast gas prices, which had been forecast to triple in the face of the start-up of $70 billion of Queensland LNG plants being built to export coal-seam gas from Gladstone.
Adelaide-based energy economics group EnergyQuest yesterday said only a doubling of traditional gas prices was likely now that oil prices were unlikely to hit $US100 a barrel soon.
While the price rises will still hurt domestic gas buyers, the improving outlook will be a relief for many manufacturers.
It will also cap expected cashflow gains for east coast gas producers such as Santos, Origin Energy, Beach Energy and BHP Billiton.
“East coast domestic gas prices are still going to be higher than historically, but more like $6-$7 per gigajoule, rather than $9-$10, and will be driven by cost of production,” EnergyQuest chief Graham Bethune said in the consultancy’s March quarter energy report.
EnergyQuest said Australian domestic gas demand was expected to fall in response to higher prices, which would also limit the price gains.
Santos and Origin Energy had been publicly predicting east coast gas prices of up to $9 a gigajoule once their Gladstone LNG projects started, while many pundits and gas buyers had been predicting prices would fly even higher.
Santos and Origin Energy — like BHP and Bass Strait partner Exxon Mobil — have been pushing buyers on to oil-linked contracts, as that is the basis on which the LNG plants, which will consume two-thirds of the east coast’s production, sell their gas.
Traditional gas prices have been between about $3 and $4 a gigajoule.
Dr Bethune said price call was based on the assumption that domestic gas supplies were available.
“There are already a range of new domestic projects being proposed by Senex Energy, Cooper Energy, Origin Energy, Beach Energy and others,” he said. “If there were not drilling restrictions in NSW and Victoria, there could be more such domestic gas proposals.”
Dr Bethune said fears of a huge rise in spot gas prices with the start-up of the first Gladstone plant, BG Group’s Queensland Curtis LNG, had proved unfounded.
“The average gas price in the Brisbane short-term trading market in the first eight weeks of 2015 was below those in the same period in 2014, notwithstanding the start-up in LNG exports,” he said, pointing to average spot prices of $3.86 a gigajoule.