Gas prices tipped to soar

South may have to import LNG to meet demand

GAS prices on Australia’s east coast are likely to surge up to 70 per cent over the next decade, according to energy consulting house Wood Mackenzie.

And the southern states will be forced to rely on imports of liquefied natural gas to get through peak demand in winter, Wood Mackenzie says.

Prices for gas could surge to between $14.30 and $15.90 a gigajoule by 2030 for Australian users – from a forecast $8.50 to $11 next year – without further exploration and lower costs for developing new supply. Close Change

Prices will rise to between $10.70 and $12.70 a gigajoule by 2025, reflecting a tightening Asian LNG market, according to the group.

Extra gas will need to be diverted from Queensland LNG producers into the southern markets by 2025 or earlier to meet winter demand, Wood Mackenzie said.

Exporters would come under pressure to cut purchases of third-party gas to ensure enough was available for Australian users as conventional fields in Victoria, New South Wales and South Australia declined.

Wood Mackenzie, which has previously been commissioned by lobby group the Australian Petroleum Production and Exploration Association to carry out research, said LNG imports would be necessary to ensure there was enough gas for domestic users.

“The Queensland LNG export projects have shattered the east coast’s ‘cheap gas forever’ mentality,” said Nicholas Browne, Wood Mackenzie’s director of gas and LNG research.

“We believe Australia’s domestic gas price is now inextricably linked to the global LNG price.

“Pipeline bottlenecks during winter will start to constrain the physical delivery of Queensland gas into the southern states from 2026.”

More than $80 billion was spent on three export projects in recent years at Gladstone (pictured), led by Origin Energy, Santos and Shell.

The operators of those facilities agreed last siphon gas supplies coast users.

Asian LNG pricing would become the de facto pricing method for Australian gas, with Queensland emerging as the market’s marginal supply option, Wood Mackenzie said.

“From 2026, with more expensive gas from Queensland setting the marginal price and limited pipeline capacity to enable flows south, prices would rise further and LNG imports become economic, and effectively set a ceiling for gas prices in the winter,” Mr Browne said. year to to east