Key gas observations for the month ending 13 September 2018:
On 12 September ACCC released a notification confirming that it will not oppose the proposed acquisition of APA Group by the CKI Consortium, after accepting a court enforceable undertaking from the CKI Consortium to divest significant assets in WA. Rod Sims said “The ACCC concluded that, in the absence of the undertaking, the proposed acquisition was likely to substantially lessen competition.”.
On 12 September Resource Minister Matt Canavan today met with east coast gas producers at a second ministerial roundtable meeting aimed at securing reliable and affordable domestic gas supplies for Australian users. At this meeting the gas industry recommitted to the Peak Electricity Demand Gas Supply Guarantee. There was also an in principle support for recommitting to the Heads of Agreement that provides domestic gas users with a first option to buy uncontracted gas, which the government will seek to finalise in the coming weeks.
Iona Underground Gas Storage levels declined to their lowest levels since 2016 on 6 September. Cold temperatures in south eastern Australia in late August early September were a key driver behind the low reserves but also a lack of response from Longford gas plant.
The National Hydrogen Roadmap was recently released which highlights the current landscape of opportunities for Hydrogen in the domestic market and potentially as an exported to commodity. One of the opportunities is identified is hydrogen to replace natural gas as a low emissions source of heat for feedstock. This will be of particular interest for ammonia production. ARENA has granted a total of $22 million to various projects which will investigate opportunities for hydrogen.
Gas prices pushed up in the first week of September in the SA, VIC and NSW markets, largely driven by a late spell of cold weather.