The reason reports like those by AEMO are forecasting a decline in demand for gas is because the price of gas is expected to rise to a level that will put pressure on the viability of Australian manufacturers, who will respond by shutting down. That does not mean the gas price will go down, it means that any producer which can supply cheap gas into the domestic market is going to make a killing, because they will be on the bottom of the cost curve.
They are basically just forecasting that it is lack of supply and consequent high prices that are going to drive lack of demand. Not that the market is going to be awash with cheap gas - anybody who draws that conclusion is obviously not familiar with the state of the Queensland CSG industry.
There are also other views out there which disagree with AEMO. In reality, neither the AEMO nor anybody else can forecast with any real accuracy what supply and demand will look like ten years from now, because both factors are driven by the price of the commodity in question - in this case natural gas. As of a few months from now when all six LNG trains are online and the ramp gas phase has finished, the eastern Australian gas market is going to be exposed to international prices. If Australian domestic demand weakens, and the gas price drops, the LNG plants are probably going to be buying up any available gas that's cheaper than they can supply themselves.
It has also been pointed out before that the only way the LNG plants can make money at a time of low oil prices (with their JCC-linked contracts) is to maximise volume by pushing their plants past nameplate capacity. But the worst-kept secret in the industry is that the CSG wells are underperforming (slower ramp-up than anticipated) while at the same time, all proponents have slashed investment due to low oil prices. So how are they going to push their plants past nameplate when they have under-invested in wells that aren't performing as planned in the first place? The answer is they are going to buy up any cheap gas they can get their hands on.
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central petroleum limited
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CTP AGM notes, page-22
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Open | High | Low | Value | Volume |
5.5¢ | 5.5¢ | 5.3¢ | $5.923K | 110.8K |
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No. | Vol. | Price($) |
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1 | 535141 | 5.3¢ |
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Price($) | Vol. | No. |
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5.5¢ | 214222 | 2 |
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No. | Vol. | Price($) |
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1 | 535141 | 0.053 |
3 | 556468 | 0.052 |
3 | 840000 | 0.051 |
3 | 500000 | 0.050 |
1 | 100000 | 0.044 |
Price($) | Vol. | No. |
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0.055 | 214222 | 2 |
0.056 | 15000 | 1 |
0.058 | 6030 | 1 |
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0.060 | 150000 | 2 |
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