With something like 250 tcf of gas resource postulated in Qld do we really care if 20% is reserved? IF there is a gas glut, even just locally, reservation means diddly.
Say we end up with 2.5 tcf, and we have to reserve 500bcf for domgas, while we are waiting for a market both for domgas and LNG who cares?
I have only read the summary of the IEA outlook. I am still a bit wary of outlooks that change so much in 12 months (and back again?), however one main point appears to have valid long term game changing implications. That is the likely redetachment of the US gas market from the global gas/LNG market.
My understanding is that gas competes with new build coal powered baseload in the US at about 6 USD/GJ (with no carbon price), and I'd expect higher if anything in Europe. Perhaps a little lower in China due to lower capex differential between coal and gas power stations (somewhat offset by more expensive imported coal/or rubbish local stuff).
I am prepared to see Asian buyers wanting a bigger discount to oil parity if they are to ramp up purchases. Atm oil is about USD14/GJ, BG say their project works around 29/bbl (USD5/GJ), and imho we have preference to gas vs coal for baseload somewhere in the 6 to 8 region, with peaking and niche preferences above that. Japan, Korea, Taiwan etc have been progressively moving from coal fired to LNG fired. Why won't China and India (and Australia) follow a similar path.
What we (and the planet) need is a ban on new coal fired power stations. That'd put a rocket up BOW.
EL
BAN COAL
BOW Price at posting:
$1.01 Sentiment: LT Buy Disclosure: Held
