Key gas observations for the month ending 15 October 2018:
ALP leader Bill Shorten last week announced that the Labor party (if elected to leadership) would implement a permanent export control trigger that would be enacted if prices became too high relative to a benchmark. The comments have been slammed by markets analyst due to the vague nature of the commitment and welcomed by gas consumers who are desperate for softer pricing.
In accordance with the Operations and process of the Australian Domestic Gas Supply Mechanism there are a number of steps the Minister must undertake before export controls can be imposed for the following year, including making notification of intent to make a determination on the state of the gas market before 30 September. On 30 September a Heads of Agreement was signed by the Prime Minister and the three LNG exporters, making a commitment to meeting any shortfall in supply in the east coast market. Under the agreement, LNG exporters have agreed to offer uncontracted gas to the domestic market on reasonable terms in the event of a shortfall. This uncontracted gas will not be offered to the international market unless equivalent volumes of gas have first been offered to the Australian domestic gas market on competitive market terms.
Santos has signed a supply agreement with Brickworks for sites across SA, VIC, QLD and NSW that will run until 2024 and deliver 15 PJ of gas.
Jemena owned Northern Gas Pipeline is in the final stages of completion and is anticipated to be operational before the end of the year.