May 2 2018 at 2:16 PM Updated 1 hr ago Senex Energy CEO favours...

• May 2 2018 at 2:16 PM
• Updated 1 hr ago

Senex Energy CEO favours open access LNG import terminal
by Angela Macdonald-Smith
Senex Energy chief executive Ian Davies has voiced support for AGL Energy's proposed LNG import terminal in the southeastern states but said an open access terminal available to all would be of greater benefit.
Mr Davies told the Macquarie Australia Conference that he was probably one of the few from the east coast gas production sector that supported the $250 million project, saying it would promote a "healthier" market by providing needed gas volumes and aiding with price discovery.
He said that while LNG imports wouldn't depress east coast gas prices they could provide a "cap" and would help buyers by providing "more optionality" over volumes.
"Do I think it's a recipe to decrease prices? Not at all," Mr Davies said. "If you do the maths you sort of end up with $10 [a gigajoule] give or take."

He said he expects prices in future years of $8-$10 a gigajoule at the Wallumbilla gas hub in Queensland. That is before transportation and retail costs to buyers, which could add several dollars more per gigajoule for customers in the southern states.

Speaking later to the Australian Financial Review, Mr Davies said he would rather see the government building the terminal, or at least insisting it is "open access", allowing any gas market participant to use it for imports. AGL is due to take a final investment decision on its import terminal at Crib POint in 2018-19.
But he added that a merchant-type terminal as proposed by the Andrew Forrest-backed Australian Industrial Energy, would be much harder, predicting it would struggle to get gas buyers to commit to long-term uptake of gas volumes taking the full risk of imported prices.
Senex is progressing two new east coast gas projects, which Mr Davies said would deliver a "step change" for Senex's production and cash flow starting from 2019.
Its Western Surat Gas Project is due to supply gas to Santos's GLNG export venture in Gladstone, while Project Atlas, which Senex won in an auction process run by the Queensland government and is expected to cost at least $200 million, is due to start production in late 2019.

Mr Davies said Senex is finalising corporate and development funding for the two projects, with a deal expected by mid-2018. Senex's 12.2 per cent shareholder, EIG Global Energy Partners, the backer of Harbour Energy's $13.5 billion takeover bid for Santos, could be involved in the financing, he said.
He said Harbour's bid for Santos "complicates" things for Senex because Santos is effectively Senex's only customer, in the Cooper Basin and at GLNG in Queensland.
Speaking earlier at the conference, Beach Energy chief executive Matt Kay said the company is playing a much bigger role in the east coast gas market since its $1.585 billion takeover of Lattice Energy, the conventional oil and gas business of Origin Energy. That deal increased Beach's share of east coast gas demand to 15 per cent from 5 per cent.
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