EnergyAustralia, one of the country’s leading energy retailers, has today declared that Australia’s golden age of gas is over.
EnergyAustralia Executive – Energy, Mark Collette, used the 6th annual Australian Domestic Gas Outlook Conference in Sydney to break the news to attendees.
"The ubiquitous resource which meant stable prices and constant availability has ended," Mr Collette said. "We had a great run; 30 years where no one had to worry about gas. It was plentiful, it was accessible and most important, it was cheap."
During his presentation Mr Collette attributed geology as one of the key factors, specifically Bass Strait, saying "these older fields were like filling a swimming pool with a fire hose."
Mr Collette said there’s still lots of gas in the ground, but the cost of its extraction is higher than the older fields. "Some of the new coal seams seem more like filling the swimming pool with a kid’s water pistol. You can do it – but it’s hard work."
"Buying gas today is fundamentally different to during the golden age," Mr Collette noted.
"Australia is part of the world market for gas now and it is the cost of new projects across the world that set the contract price for gas – often measured via oil linkages or Henry Hub pricing.
"The Australian gas market is tighter than in the past with less physical redundancy – meaning security of gas supply must now be considered by big buyers in planning their gas needs."
The good news is the Australian industry can still compete internationally. Mark said EnergyAustralia has a portfolio of physical and financial options available to both secure physical gas and hedge gas price risks.
"Customers who enter longer term supply commitments that underpin new gas fields, LNG import terminals and/or pipelines will develop a suite of physical and financial supply options that can help their businesses succeed."
"Our job is to understand our customer’s business and develop the right gas options – to provide deals that give customers the best chance to succeed in their markets," Mr Collette said.
The 6th annual Australian Domestic Gas Outlook Conference is being held 27 February – 2 March 2018 at the Four Seasons Hotel in Sydney, Australia.