Gas prices to surge on Queensland export launch
Source: SMH, 4 August 2014
Gas prices are forecast to rise steeply in eastern Australia in the wake of the launch of gas exports from Queensland later this year, which will undermine much of the energy source’s competitive position when compared with electricity.
Forecasts included in an application lodged by gas distributor Jemena to the Australian Energy Regulator includes data which points to the steep price rises anticipated as domestic wholesale gas prices rise towards international levels.
Jemena, which is controlled by Chinese and Singapore government entities, has indicated it is willing to trim its charges, which make up to half of the quarterly gas bill, in a bid to limit a possible slide in gas demand as wholesale prices surge.
Projections included in Jemena’s application signal the wholesale gas price will double to $8 a gigajoule between 2014 and 2018. Adding in transportation and other charges, this will push the price to around $10 a gigajoule.
This is around double the domestic US price for gas of around $US4.50 a gigajoule. The surge in gas produced from so-called unconventional sources such as shale, has pushed down gas prices in the US, resulting in many companies seeking to export surplus production to Europe and Asia.
Reflecting the imminent start to gas exports from eastern Australia, household gas prices in NSW rose 17 per cent from the beginning of July, with concerns that prices will continue to rise over the next few years.
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