The Australian Petroleum Production & Exploration Association (APPEA) has responded following what it says are “misrepresentations of the sector”, made by Industry Minister Ed Husic in relation to gas prices.
APPEA said it was irresponsible for a Federal Cabinet Minister responsible for business policy to repeatedly demonise and misrepresent an industry so critical to the national economy.
APPEA Chief Executive Samantha McCulloch said: “It is easy to misrepresent how the gas market works, but the facts are that average domestic prices are well below international prices,” she said.
“While a range of prices can be offered to customers in direct negotiations, the average realised domestic prices reported by APPEA members to the Australian Securities Exchange recently for the third quarter sit between $8.50/GJ and $13.10/GJ, well below the international market.
“For example, the average realised price for Origin Energy’s APLNG is A$12.44/GJ for the third quarter 2022. During the same period, the average realised price for LNG sales was A$19.52/GJ.
“Santos had an average realised price of A$13.10/GJ for the same period compared to about $26/GJ being offered by GLNG internationally.
Ms McCulloch said most businesses were on long-term contracts at lower prices given the way the wholesale gas market operated.
“Around 85 to 90 per cent of the gas market is covered by long-term contracts which were offered in 2021 for this year – and locked in by many customers – at price levels of around A$6/GJ to $9/GJ,” she said.
“The remainder is covered by smaller, volatile spot price markets which for much of this year have been around 50 to 70 per cent lower than those paid internationally.
“The industry has secured domestic supply and has worked tirelessly to get the gas to where it needs to go and ease pressures caused by a lack of policy support, bans and regulatory uncertainty for years in some jurisdictions; global energy market turmoil; and coal-generation outages and renewables failing to generate electricity during winter.”
