Energy in Australia

Prices
The majority of Australian LNG is sold under long term contracts linked to
oil prices. While volumes are still relatively small, an increasing proportion
of LNG is also sold under short term contracts and traded on the spot
market. Spot market prices are based on exisiting market conditions.
Landed LNG prices in Japan (Australia’s largest LNG importer) in 2015
are estimated to be around US$10.30 a gigajoule (around A$13.70 a
gigajoule). Average Australian LNG export prices (total export value
divided by volume) declined 3.8 per cent in 2014–15 to around A$676 a
tonne (A$12.43 a gigajoule).
Table 7.5: Gas prices in 2014–15 dollars
Natural Gas
2011–12 2012–13 2013–14 2014–15
Domestic Spot A$/GJ 3.72 5.37 4.23 3.25
Price a
Liquefied Natural
Gas b
Export unit value A$/t 690.91 637.17 718.84 677.99
A$/GJ 12.70 11.71 13.21 12.46
Notes: a) Financial year average of eastern market daily spot prices
b) Calculated from LNG export volumes and values
Source: AEMO; Department of Industry, Innovation and Science (2015) Resources and Energy Quarterly
Gas producers sell gas domestically in wholesale markets to major
industrial, mining and power generation customers, and to energy retailers
that sell it to business and residential customers. Until recently, Australian
gas prices have generally been low by international standards, typically $3
to $4 per gigajoule. Most historical gas prices have been under confidential
long term contracts, with limited exposure to international prices.
There has been a recent shift towards shorter term contracts and spot
markets. Victoria established a wholesale spot market in 1999 for gas
sales, to manage system imbalances and pipeline network constraints.
90 ENERGY IN AUSTRALIA 2015