Natural gas

[noirua]

UK Gas price crisis -
1. On 1 Oct the energy price cap - that over half of all homes are on - will jump 12% to £1,277/yr (on typical use)

The price cap changes each October and April. Yet the assessment period that dictates it is far earlier. The new 1 Oct cap is based on average wholesale prices for the six months until the end of July. Yet... the wholesale price has exploded since then. - Cheapest fixes are 60% costlier than a year ago.

 

[Smurf1976]

UK Gas price crisis

It goes beyond price alone too.

Multiple energy retail companies in the UK have already gone bust financially and more are expected to do so in the near future. Some forecasts have suggested that of about 70 companies, only 10 or so will likely survive the coming months - they'll be the big ones mostly.

It's also causing some shutdowns in industry and so on plus in at least one case government intervention to avoid that happening.

 

[qldfrog]

It goes beyond price alone too.

Multiple energy retail companies in the UK have already gone bust financially and more are expected to do so in the near future. Some forecasts have suggested that of about 70 companies, only 10 or so will likely survive the coming months - they'll be the big ones mostly.

It's also causing some shutdowns in industry and so on plus in at least one case government intervention to avoid that happening.

So Putin gas pipeline getting all the more critical to Europe beside their green brainwashing.Putin is now in a very real "who's your daddy?" position of strength.
While i rejoice at the lessons in life and karma bitch, you have to pity the European citizens.
As for Australia, what happened to these headlines a few years ago stating we would become either the first or second world gas exporter?

 

[Knobby22]

So Putin gas pipeline getting all the more critical to Europe beside their green brainwashing.Putin is now in a very real "who's your daddy?" position of strength.
While i rejoice at the lessons in life and karma bitch, you have to pity the European citizens.
As for Australia, what happened to these headlines a few years ago stating we would become either the first or second world gas exporter?

We are equal 4th or 5th.
Shipping vs pipelines.

Putin has managed to make Germany reliant on him due to Merkel shutting down nuclear plants. Very dumb.

 

[qldfrog]

We are equal 4th or 5th.
Shipping vs pipelines.

Putin has managed to make Germany reliant on him due to Merkel shutting down nuclear plants. Very dumb.

And closing coal too.once the woke view of Merkel diseappears she will be seen as one of the worst leader in Germany for a while.following the narrative and destroying the last European economic powerhouse.

 

[divs4ever]

LNG sellers seek credit letters as gas price spike stretches credit limits​

https://au.investing.com/news/commo...s-price-spike-stretches-credit-limits-2437912

sellers getting nervous ... interesting

 

[Smurf1976]

sellers getting nervous ... interesting

At the retail (to the public) level quite a few companies in the UK have already failed financially.

At the wholesale level well there's definite concern that all of a sudden people who are used to dealing with $20 million now have 1 in front of that.

A big problem there is that some of those in the middle may well turn out to be hedged on one side only. That is, they're selling natural gas under contract to whoever, or are themselves using it to generate electricity which they sell under contract, but they didn't hedge their gas purchases. Anyone in that situation is potentially making huge losses on every ship load of LNG that turns up - buy at $120 million in order to sell it at $20 million. You can't do that for too long before you go broke.

That's speculation on my part but it's definitely possible that someone with contracts to supply gas failed to hedge the purchase of it and is now a financial dead man walking in the same way as the retailers who are locked into a sell price but didn't hedge their buy price have blown up financially.

Needless to say, those on the consumption side won't be at all interested in renegotiating contracts at this point in time.

 

[divs4ever]

yes your speculation is well reasoned ,
but despite the customers freed-up by the failing minnows will the big players get those customers , they MIGHT opt for better home insulation , or other strategies to use heat more efficiently ( smaller rooms , more layers of clothing etc. etc . )

there is a tiny chance gas consumption will decrease at least in the mid-term

 

[Smurf1976]

The price situation does look to be coming through into the Australian market now. Perhaps not with contract pricing but certainly with the spot price it's becoming pretty visible.

Until ~2 weeks ago prices were sitting around the $8 / GJ mark but have moved up quite sharply since then. Current spot prices:

Melbourne = $15.89
Sydney = $13.05
Brisbane = $12.80
Adelaide = $12.00

So price does seem to be moving up significantly at the moment. With the international LNG price being high, it's profitable to buy up gas on the domestic market and run it through the LNG plants in Queensland so that's what's happening. Gas storage inventory is being drawn down in order to keep the LNG plants going flat out since there's $ to be made by doing so.

There's a lot of politics surrounding gas in Australia - I'll keep out of that here and I'm just commenting on what's actually happening physically and with price on the basis that it may have financial relevance to companies operating in this industry.

Data is current for today. Source = Australian Energy Market Operator (AEMO).

 

[sptrawler]

The price situation does look to be coming through into the Australian market now. Perhaps not with contract pricing but certainly with the spot price it's becoming pretty visible.

Until ~2 weeks ago prices were sitting around the $8 / GJ mark but have moved up quite sharply since then. Current spot prices:

Melbourne = $15.89
Sydney = $13.05
Brisbane = $12.80
Adelaide = $12.00

So price does seem to be moving up significantly at the moment. With the international LNG price being high, it's profitable to buy up gas on the domestic market and run it through the LNG plants in Queensland so that's what's happening. Gas storage inventory is being drawn down in order to keep the LNG plants going flat out since there's $ to be made by doing so.

There's a lot of politics surrounding gas in Australia - I'll keep out of that here and I'm just commenting on what's actually happening physically and with price on the basis that it may have financial relevance to companies operating in this industry.

Data is current for today. Source = Australian Energy Market Operator (AEMO).

When you add that, to the increase in fuel costs and the increase in shipping costs, how long before we see some interesting inflation figures?

 

[Smurf1976]

The gas price shock in the UK and Europe, and anywhere else exposed to LNG pricing, continues:



Chart image from this article: https://www.bbc.com/news/business-59760331

It hasn't yet hit the Australian domestic market to major extent but if the situation continues then it's only a matter of time. Not much gas is being put into storage since last winter, it's more profitable to sell it overseas as LNG, but at some point that has to change in order to physically meet demand.

 

[frugal.rock]

A Flotilla of U.S. LNG Cargoes Is Headed to Fuel-Starved Europe
By Sergio Chapa
23 December 2021, 04:53 GMT+11
Bloomberg

 

[qldfrog]

https://finance.yahoo.com/news/cargo-ships-divert-gas-china-131518083.html

 

[Smurf1976]

Regarding natural gas spot market prices in Australia, I just thought I'd draw attention to the huge spike that's occurring.

2020 prices were around $5 per GJ (gigajoule).

2021 mostly in the $6 - $8 range.

January 2022 around $10.

2 May 2020 about $15 then came the rocket.

3 May reached $16.90

4 May reached $19.10

5 May = $23.64

6 May = $30.00

7 May = $30.40

8 May = $29.65

9 May = $33.97

10 May = $38.42

11 May = $40.00

And the current forecast for later today, 12 May, is $55.00

Those prices are for Victoria and the data source, for historic prices and the forecast, is AEMO (the Australian Energy Market Operator) so that's as official as it gets.

Other eastern states are much the same although the spot market is far less active than in Victoria hence that being the benchmark.

Given that a large portion of gas is sold under contracts the spot price has only modest relevance in the short term in terms of company expenses and revenues but still, it's a very rapid runup in price going on there and we're now at the point where it's becoming cheaper for those who can switch fuels, eg some gas-fired power stations have the ability to use diesel, to do so. Indeed in SA there's already been some increased running of diesel for purely economic reasons, it's becoming cheaper than gas and that's despite the diesel price run up.

Posting it just for info. No comment on who might profit since I don't know all the hedging arrangements and so on but now certainly wouldn't be a good time to be an unhedged buyer of gas. The Australian domestic market is now experiencing a price shock similar to that seen in various other countries over the past 12 months.

 

[Value Collector]

There is a huge new gas field that may soon be developed in the NT, It sits right in the middle of Apa’s east coast grid and their NT system.

The huge volumes that could come from this field could completely offset the depletion of the southern fields and help australia transition off coal by backing up renewables, and help increase our exports.

 

[SirRumpole]

Origin Energy pulls out of fracking in the Beetaloo basin.

There are some big implications for the future of gas in this country.

I hope they have alternative plans, like hydrogen.

Origin quitting fracking project an 'indicator' of gas industry's future, analyst says

Origin Energy's decision to back out of plans to frack for gas in the Northern Territory's Beetaloo Basin could be an early indicator of "fossil fuels falling away", according to an energy analyst.

www.abc.net.au

 

[qldfrog]

Origin Energy pulls out of fracking in the Beetaloo basin.

There are some big implications for the future of gas in this country.

I hope they have alternative plans, like hydrogen.

Origin quitting fracking project an 'indicator' of gas industry's future, analyst says

Origin Energy's decision to back out of plans to frack for gas in the Northern Territory's Beetaloo Basin could be an early indicator of "fossil fuels falling away", according to an energy analyst.

www.abc.net.au

Alternative what??
We are such deep **** but you can not force a Reset if all is good with current situation..so in the abyss we are led

 

[SirRumpole]

Alternative what??
We are such deep **** but you can not force a Reset if all is good with current situation..so in the abyss we are led

Indeed so. Lack of planning once again, although it's not a bad as shutting down current productive assets and replacing them with nothing..

 

[sptrawler]

Indeed so. Lack of planning once again, although it's not a bad as shutting down current productive assets and replacing them with nothing..

The fact that there wont be enough gas to run alternative generating assets, they are effectively shutting down productive assets and replacing them with nothing. As the coal generators will fail, due to no new coal, age and reluctance to spend money on them.
Sleep walking into a disaster, but maybe that is good, as it will certainly wake people up.
It will be great when people are sitting in the dark, looking at a poster of the back of Sarah Hanson what's her names dress.


Hope that doesn't come back to bite her in the coal.

 

[SirRumpole]

Interesting update on the Beetaloo.

Fracking giant backed by American billionaires buys up Origin's Beetaloo stakes

Tamboran Resources has overnight become the biggest player in the Northern Territory's Beetaloo Basin.

www.abc.net.au

A company facing fines for refusing to front a senate committee investigating gas subsidies has overnight become the biggest player in the Northern Territory's Beetaloo Basin.

Key points:​

• Tamboran Resources secured $195 million during its capital raise to buy Origin's permits
• The project is now heavily backed by American billionaire Bryan Sheffield
• Tamboran's CEO says he "couldn't disagree more" that Origin's sale was a red flag

After racing to raise millions of dollars in investments, the company now has power to explore for gas buried deep in the basin, across almost 2 million acres.

Origin Energy announced on Monday it would be abandoning plans to frack for gas amid what it described as "uncertain and expensive efforts to drive the projects into the production phase".

Tamboran locked in more than $195 million from investors in a matter of days, of which more than half came from "strategic money out of the US", according to the company's chief executive Joel Riddle.