Major gas users want the West Australian government to ensure the LNG giants meet their domestic gas obligations as they seek to retain the OECD’s lowest prices.
Wesfarmers and other major gas users in Western Australia are heading for a showdown with LNG heavyweights Woodside Energy, Chevron and Shell as billionaires Gina Rinehart and Chris Ellison bet big on onshore reserves of the fossil fuel in the Perth Basin.
Woodside, reaping sky-high prices of its LNG on export markets, defended its contribution to the WA domestic gas market, where prices are similar to the very low prices enjoyed by the US manufacturing sector. “We think some LNG suppliers are not meeting their obligation or if they are, they are not doing it in a transparent way,” he said.The four alliance members, Wesfarmers, Alcoa, Coogee Chemicals and Yara, represent about 50 per cent of private sector demand for gas in WA. Alumina producer South32 is another of the biggest customers and almost all of the mining industry has come to rely on relatively cheap gas under the WA reservation policy.
That compares with a price of $2-$3 a gigajoule or even lower at times in recent years and to much higher prices on the east coast before a notable softening in December in the run-up to the imposition of wholesale price caps. WA has the cheapest natural gas prices in the OECD, making it “a low energy price paradise”,The average price paid by industrial customers in the south-eastern states in 2023 is expected to be $9.
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