providing an endorsement of the price reporting agencies or the specific methods adopted by those agencies. ). The ACCC expects LNG prices to rise from $5.46 a gigajoule currently to a peak of about $10.70 in February 2020. The ACCC obtains this data from Argus under licence. … The ACCC also publishes a spreadsheet (updated with each update to the price series) that shows the prices underlying the price series, including a step-by-step calculation of forward LNG netback prices. Australia remains top LNG supplier to China. For a given period of gas supply within the forward LNG netback price time horizon (that is, the end of the following calendar year), individual LNG netback prices for each month of the supply period can be averaged to determine a domestic supplier’s opportunity cost of supplying the East Coast Gas Market at Wallumbilla over that period. Users may also substitute these extended measures of forward LNG prices for alternative measures, such as forecasts by commodity price reporting agencies or industry analysts. about $2.5 billion in sharemarket value wiped out by falling commodity prices in early April. The prices shown are for information only and do not represent the ACCC: The chart below displays historical and forward LNG netback prices. The Intercontinental Exchange quotes JKM futures prices beyond this, so users are able to use these as measures of forward LNG prices (noting that liquidity in the JKM futures market is currently relatively limited beyond a period of around 6 months). This includes forward LNG prices, LNG freight costs, exchange rates, LNG plant operating costs and fuel gas, and pipeline transportation costs. Argus shall not be liable for any loss or damage arising from any party’s reliance on Argus’ data, and disclaims any and all liability related to or arising out of use of the data to the full extent permissible by law. Briefly in mid-2016 and again in early 2017, Australia’s domestic natural gas prices exceeded Australian LNG export prices to Japan, Australia’s largest destination for LNG exports, when domestic natural gas shortages caused price spikes in natural gas markets. This follows investment of approximately As … “The LNG boom is back,” Wood Mackenzie LNG research director Giles Farrer said at the time. For comparison, the average price of autogas in the world for this period is 0.75 Australian Dollar. Australian exports of liquefied natural gas (LNG) are expected to pick up substantially as a number of large-scale LNG projects begin production over the next few years. Australia is about to become the world's largest exporter of liquefied natural gas. Last updated on 17 May 2021. Jan. Woodside said on Thursday that Scarborough off Western Australia will have a cost of supply below $6.80 per mmBtu. Due to the large amount of capital required to fund the LNG investment. The effect of any changes will flow through to the final calculation of LNG netback prices at Wallumbilla. ( PDF 780.05 KB The average of forward LNG netback prices over a given period of future gas supply can be used by gas buyers in negotiations with suppliers as an indicator of a domestic supplier’s opportunity cost of supplying the East Coast Gas Market at Wallumbilla. The decline in export earnings is expected to be driven primarily by weak contract and spot prices and, to a lesser extent, lower export volumes. The ACCC welcomes feedback on the LNG netback price series and the accompanying guide. Users should also seek professional advice appropriate to their circumstances. Australian independent Beach Energy expects the building of an LNG import terminal in east Australia will become the price setter for gas prices in Victoria, New South Wales (NSW), South Australia and Tasmania states. Prices of LNG sold from Australia are under long term contract linked to a crude oil benchmark. Platts, its affiliates, and their respective third party licensors disclaim any and all warranties and representations, express or implied, including any warranties of merchantability or fitness for a particular purpose or use with respect to the Platts material, including any information or data contained therein or the results obtained by their use or the performance thereof. This article provides an overview of the global market for natural gas and details the oil-linked pricing of Australian LNG LNG prices follow the oil price, albeit with a three-month lag. When adjusted for these factors, an LNG netback price represents the price that a gas supplier would expect to receive from a domestic gas buyer to be indifferent between selling the gas to the domestic buyer and exporting it. LNG export earnings in Australia are forecast to fall sharply, from $48 billion in 2019–20 to $31 billion in 2020–21. Argus Media Ltd is the source of the confidential proprietary LNG forward freight cost estimates which the ACCC has republished on this web page. Australian LNG in the pricing gun. Below are some practical tips that may be useful to users in making such adjustments. LNG exports hit record levels last year, domestic gas availability improved, and average prices fell. Australia has good reserves of CSG (and other forms of natural gas). Shipments from Australia totalled 3.06 million tonnes last month, up 10 per cent from last year and accounting for about 45 per cent of China’s total liquefied natural gas (LNG… Senex will deliver 1.1 petajoules from January 1, 2020 and 2.2 PJ from 2021, with the potential to extend the agreement by six years for up to 6.6 petajoules of gas. However, it has dropped its 2020 average gas price forecast slightly from $9 a gigajoule down to $8.97. Despite this expected growth, the Australian Energy Market Operator has warned of potential domestic gas shortages unless new pipelines and import terminals are built. A year ago, in March-June 2020, the monthly number of … ( Australia was the second largest LNG producer in the world with 75.39 Mt of production, behind Qatar, which had 77.80 Mt, according to GIIGNL. The ICIS East Asia Index (EAX) for October-delivered cargoes averaged $4.289/MMBtu, up 53% from the previous month, as the market staged a recovery from … In 2014, a report by Deloitte Access Economics forecast $118 billion in damage to the manufacturing sector between 2014 and 2021 if gas prices rose to between $8 and $9 a gigajoule. Users acknowledge and agree that Platts, its affiliates, or its licensors own the Platts Material used in the ACCC’s calculation of LNG netback prices, and all intellectual property rights therein, including, without limitation, any patent, trade secret, copyright, and trademark rights (whether or not such rights are registered). Next update on 1 June 2021. While the forward period for the price series by default ends at the end of the following calendar year, users are able to extend this. Spot LNG prices strengthened from mid-August to mid-September on the back of ongoing repair work in Australia and after a hurricane swept through the US, halting output from two major LNG plants. The Platts material and all components thereof are provided on an 'as is' basis and ACCC website users’ use of the Platts material is at their own risk. It has since recovered to about $US72 a barrel due to cuts in global production by oil cartel OPEC, US sanctions on Iranian oil and an attempted coup d’etat to overthrow President Nicolas Maduro in major oil producer Venezuela. However, revenues were down more than 25 per cent from 2019 to $36.1bn. While the exact terms of the contract are confidential, a key benchmark is a basket of crude oil landed in Japan or Japan Crude Cocktail. The ACCC publishes the LNG netback price series as one of the measures to improve transparency of gas prices in the east coast gas market. It is a turnaround for the LNG industry after energy companies including Woodside, Santos and Oil Search saw about $2.5 billion in sharemarket value wiped out by falling commodity prices in early April. In April, just as in January 2021, there were only 3 cargoes of coal from Australia to China. Earlier in the week, junior company Senex Energy agreed to sell almost 10 petajoules (PJ) of gas to manufacturer Orora’s three plants in Queensland from 2020 onwards. Annual simple average forward prices are displayed only for each complete calendar year. Major manufacturers such as Orica has previously slammed major gas companies' attitude. Australia shipped about $10 billion of LNG to China last year. Japan remained Australia’s biggest customer, taking up 38 per cent of our production, while China nipped at its heels, importing 37 per cent of Australian LNG output. Prices in Australia and Japan, the biggest LNG buyer, are converging once liquefaction and shipping costs of A$5 to A$6 are included, according to the Grattan Institute, a Melbourne- based research group. The user would then be able to use this average to assess price offers made by domestic suppliers for that same period of supply (noting that other factors may be relevant, such as the terms on which the gas will be supplied, transportation costs and any applicable retailer charges). setting a level of gas prices in the east coast gas market or any other market in Australia, forecasting international or domestic gas prices, forecasting any of the inputs used in the calculation of the LNG netback prices, or. Asian spot prices for LNG LNG-AS rose above $10 per million British thermal units (mmBtu) this week, data from price agency S&P Global Platts showed. at 10:16 am on April 7, 2014 | 4 comments. In establishing the Gas Inquiry, the Australian Government directed the ACCC to provide information to the market as appropriate. Major manufacturers such as Orica has previously slammed major gas companies' attitude towards domestic gas supply and warned that gas-intensive manufacturers could close unless domestic gas shortages and high prices were addressed. XLSX 300.17 KB forecast a $US200 billion ($285 billion) global LNG construction surge from late 2019. The competition watchdog expects liquefied natural gas prices to almost double over the coming months as Australia continues to grapple with a potential east-coast gas shortage. Core Energy report for ACCC - November 2018 For example, if a user was seeking gas supply over the next full calendar year, the LNG netback price series would allow them to determine the average of forward LNG netback prices over that year at Wallumbilla. Two small buyers asked not to make new purchases from exporter. Guide to the LNG netback price series - October 2018 One petajoule can supply a city the size of Wollongong for a year. None of Platts, its affiliates or their respective third party licensors shall be subject to any damages or liability for any errors, omissions, interruptions, or delays in the Platts material. PDF 6.31 MB The ACCC publishes transportation prices, which can be used in conjunction with the LNG netback price series to estimate an indicative reference price of gas in locations other than Wallumbilla. "This situation continues to deteriorate and should be an unacceptable situation for all levels of government given Australia’s natural abundance of gas resources," an Orica spokesman said. By David Llewellyn-Smith in Australian LNG. COVID-19 (coronavirus) information for consumers, Unauthorised transfer of landline & internet services, Consumer rights for landline & internet services, COVID-19 (coronavirus) information for business, Industry associations & professional services, Competing fairly in professional services, Transmission services & facilities access, Retail electricity pricing inquiry 2017-2018, Monitoring & reporting for container stevedoring, Australian Competition & Consumer Commission, Compliance & enforcement policy & priorities, UniSA & ACCC Competition Law & Economics Workshop, Mergers & Competition Exemptions consultations, Cookies, website analytics & other website information, Digital platform services inquiry 2020-2025, Feminine hygiene products price monitoring, Foreign currency conversion services inquiry, Murray-Darling Basin water markets inquiry, Residential mortgage products price inquiry, Authorisations and notifications registers, Collective bargaining notifications register, Resale Price Maintenance notifications register, Guide to the LNG netback price series - October 2018, LNG netback price series - Public version - 14 May 2021, Core Energy report for ACCC - November 2018, historical monthly LNG netback prices at the Wallumbilla Gas Supply Hub (Wallumbilla) in Queensland, dating back to January 2016 based on a measure of historical Asian LNG spot prices, and.

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