LNG exports push up gas prices, crimp demand
Source: AFR, 17 Dec 2014
The $60 billion liquefied natural gas export boom in central Queensland is set to push up domestic gas prices and contribute to a 5 per cent annual fall in Australia’s gas consumption over the next five years.
Matching a similar fall in electricity demand over recent years, the national energy forecaster has predicted gas-powered power generation is set to fall almost 17 per cent a year because of falling consumption and rising gas prices.
The Australian Energy Market Operator national gas forecasting report to be released on Wednesday found the LNG exports, which will begin from the Port of Gladstone this month, would boost total gas consumption to 23 per cent a year up to 2020.
This compares with a 0.7 per cent decline over the past four years.
But excluding the Queensland LNG production, annual gas forecasts are projected to fall at an average annual rate of 5.2 per cent.
AEMO chief executive Matt Zema said the LNG export boom was likely to change the domestic gas market forever. “Higher gas prices are basically here to stay,” Mr Zema told The Australian Financial Review. “Australia has been setting its gas prices as an island and now the reality is LNG is linking us back to world gas prices.”