Wood Mackenzie: High power prices here to stay as gas shortages expected remain

The latest Australia East Coast Gas Market Outlook 2018 – 2032, from Wood Mackenzie indicates the gas shortage problem on the east coast will remain beyond 2030 and as a result high power prices are set to stay and possibly increase.

Wood Mackenzie: High power prices here to stay as gas shortages expected remain Wood Mackenzie: High power prices here to stay as gas shortages expected remain Wood Mackenzie: High power prices here to stay as gas shortages expected remain Wood Mackenzie: High power prices here to stay as gas shortages expected remain Wood Mackenzie: High power prices here to stay as gas shortages expected remain
 
The report connects the dots between Australia's domestic gas price and the global LNG price, with production of gas unlikely to meet both LNG export demand as well as supply the domestic market.
 
"Based on our supply forecast, from 2028 there is not enough gas to meet both LNG contracts and demand," Wood Mackenzie gas and LNG research director Nicholas Browne said.
 
"The Queensland LNG export projects have shattered the east coast's ‘cheap gas forever mentality," 
 
"We believe Australia's domestic gas price is now inextricably linked to the global LNG price…this competition between domestic buyers and the Asian markets for available gas is likely to contin...