As pipeliners, we take a long-term view of the transformative opportunities facing the Australian gas industry. We believe a market-driven approach will overcome the current challenges around gas price volatility and supply constraints by further developing the missing links that will enable genuine connectedness, greater flexibility and operating synergies across a national gas transportation grid – one that can deliver gas where it is needed most and at the right price.
Looking at mature gas trading environments like the USA provides some aspirational direction in terms of the fluidity of the gas trading environment, where pricing is more dynamic. However, the past and present development opportunities within our own backyard also provide valuable insight. Building the Eastern Gas Pipeline transformed the east coast gas market by introducing a competitive alternative for gas transportation into Sydney and upstream competition between basins. A similar market-led opportunity exists today to build infrastructure connecting Northern Territory gas producers to east coast markets – introducing a competitive alternative for gas transportation and upstream competition between the Beetaloo/McArthur basins and the Surat/Bowen basins. Winning the right to build the Northern Gas Pipeline was an important first step in Jemena realising this vision.
Current regulatory discussions would not be relevant if the industry can shape its own market. Jemena’s northern Australia growth strategy could be the catalyst to resolving these challenges and avoiding further gas constraints or Australian Competition and Consumer Commission interventions seeking to address theoretical issues, rather than solving actual market challenges.
Supply and demand determinants of natural gas price volatility in the U.K.: A vector autoregression approach