In the latest version of selling coals to Newcastle, selling gas to Australia could become the latest Asia-Pacific gas market opportunity.
To the surprise and outrage of the Australian public and the media, in a country with vast gas resources, a reasonable gas transportation system and adequate processing capacity, gas is no longer available at $3 per gigajoule – leaving room for cheap imports. In fact, no-one should be surprised that local gas is prohibitively expensive after a decade of market intervention, failure to respond to recommendations for market improvement, and forecasts of supply-and-demand imbalance.
Attempts to blame the gas industry and suggestions that it can solve these issues are ill-founded. What’s needed is sound policy and regulation to create an efficient and transparent market, which, in turn, attracts smart capital.