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predict wallumbilla hub prices for the next 10 years

Predicting natural gas prices at the Wallumbilla Gas Supply Hub over the next 10 years (2025–2035) is challenging due to the volatility of energy markets, influenced by global and domestic factors such as LNG demand, renewable energy transitions, production costs, and policy changes. Since specific long-term forecasts for Wallumbilla Hub prices are not readily available in the provided data or public sources, I’ll construct a reasoned estimate based on available information, including LNG netback price trends, global natural gas price forecasts, and Australian market dynamics. All prices will be in AUD per gigajoule (GJ), and assumptions will be clearly stated.

Key Assumptions

1. LNG Netback Influence: Wallumbilla prices are closely tied to LNG netback prices, which reflect the export parity price for Australian gas based on Asian LNG spot and contract prices, minus transportation and liquefaction costs. The Australian Competition and Consumer Commission (ACCC) provides historical and forward LNG netback prices for Wallumbilla, which serve as a proxy for domestic gas prices.

   
   
2. Historical Price Baseline: Historical volume-weighted average (VWA) prices at Wallumbilla, such as $8.30/GJ in March 2017 for SEQ trades, suggest a range of $8–$12/GJ in recent years, adjusted for inflation and market conditions.

   
   
3. Global Price Correlation: Australian gas prices are influenced by global benchmarks like Henry Hub (US) and Dutch TTF (Europe). Long-term forecasts for these markets provide guidance, though Wallumbilla prices typically carry a premium due to LNG export exposure.

   
   

   
   
4. Renewable Transition: Australia’s push for net-zero emissions by 2050 will increase renewable energy adoption, potentially reducing domestic gas demand in power generation but sustaining industrial and LNG export demand. This may moderate price growth.
5. Inflation and Currency: AUD prices will be affected by inflation (assumed at 2.5% annually) and AUD/USD exchange rate fluctuations (assumed stable at ~0.67 USD/AUD for simplicity).
6. Supply and Demand: East coast gas production is expected to remain stable or decline slightly due to maturing fields, while LNG exports will continue to compete with domestic needs, supporting prices.

   
   
7. Policy and Market Reforms: Initiatives to boost Wallumbilla Hub liquidity, such as ASX futures contracts and market reforms, may stabilize prices but are unlikely to drastically lower them.

   
   

   
   

Methodology

• Short-Term (2025–2027): Use ACCC’s forward LNG netback prices (2-year short-term and 5-year medium-term) as a starting point, adjusted for domestic market factors.
• Medium-Term (2028–2030): Extrapolate from global natural gas price forecasts (e.g., Henry Hub, TTF) and apply a premium for Australian LNG linkage.
• Long-Term (2031–2035): Account for renewable energy impacts, declining domestic demand, and sustained export demand, with conservative growth rates.
• Conversion: Global forecasts are often in USD/MMBtu or USD/Mcf. 1 MMBtu ≈ 1.055 GJ, and 1 Mcf ≈ 1.055 GJ. AUD prices are calculated using the assumed exchange rate.

Step-by-Step Forecast

1. Short-Term (2025–2027)

• ACCC LNG Netback Data: The ACCC provides forward short-term (2-year) and medium-term (5-year) LNG netback prices for Wallumbilla, based on Asian LNG spot and oil-linked contract prices.

  
  
  • Historical netback prices (2016–2025) have ranged from ~$6–$15/GJ, peaking during global energy crises (e.g., 2022).
  • Forward short-term prices (2025–2027) are not explicitly quoted in the data but are expected to align with recent trends (~$10–$12/GJ), given stable Asian LNG demand and moderate global prices.
• Global Context:
  • Henry Hub forecasts for 2025–2026 range from $3.4–$4.6/MMBtu (~$5.1–$6.9/GJ at 0.67 AUD/USD).

    
    

    
    
  • Dutch TTF forecasts for 2025–2026 are 11.5–10.5 USD/MMBtu ($17.2–$15.7/GJ), but Australian prices are typically lower due to proximity to Asian markets.

    
    
• Wallumbilla Estimate: Assuming a $2–$3/GJ premium over Henry Hub (due to LNG export linkage), Wallumbilla prices are estimated at $10–$12/GJ for 2025–2027, consistent with recent domestic spot price ranges.

2. Medium-Term (2028–2030)

• Global Forecasts:
  • Deloitte projects Henry Hub at $5.4/Mcf ($5.1/GJ) in 2030, rising to $4.6/MMBtu ($6.9/GJ) in 2032.

    
    
  • TTF is projected at $10.65/Mcf ($10.1/GJ) in 2030, increasing to $11.1/Mcf ($10.5/GJ) in 2032.

    
    
  • World Bank estimates Henry Hub at $4/MMBtu (~$6/GJ) by 2030.

    
    
• Australian Market:
  • LNG export demand remains strong, supporting prices, but domestic demand may soften due to renewable energy growth in power generation.
  • ACCC’s medium-term netback prices (up to 2030) are expected to stabilize around $11–$13/GJ, reflecting oil-linked LNG contracts and moderate global demand growth.
• Wallumbilla Estimate: With a $2–$4/GJ premium over Henry Hub and alignment with netback trends, prices are projected at $11–$14/GJ for 2028–2030, adjusted for 2.5% annual inflation (~$12–$15/GJ in nominal terms by 2030).

3. Long-Term (2031–2035)

• Global Trends:
  • Post-2030, global natural gas demand growth slows in developed economies due to renewables, but industrial and developing market demand (e.g., Asia) sustains prices.
  • Deloitte’s forecast for Henry Hub at $6.55/Mcf ($6.2/GJ) by 2040 suggests gradual price increases (2% annually post-2030).

    
    
  • TTF and UK NBP prices are projected to rise modestly, reaching $11–$12/Mcf ($10.4–$11.4/GJ) by 2032.

    
    
• Australian Context:
  • Declining east coast gas production (e.g., Surat-Bowen Basin) may tighten supply, supporting prices.
  • Renewable energy reduces gas use in electricity but not in industrial sectors (e.g., alumina, chemicals), maintaining demand.
  • LNG exports continue to set a price floor via netback pricing.
• Wallumbilla Estimate: Assuming a $3–$5/GJ premium over global benchmarks and 2.5% inflation, prices are projected at $13–$16/GJ in 2031–2035 (nominal terms: ~$15–$19/GJ by 2035).

Year-by-Year Forecast (Nominal AUD/GJ)

	Year	Price Range (AUD/GJ)	Notes
1	2025	10–12	Aligned with ACCC short-term netback, stable LNG demand.
2	2026	10–12	Continued global price moderation, domestic demand steady.
3	2027	10.5–12.5	Slight upward pressure from supply constraints.
4	2028	11–13	Transition to medium-term netback trends, inflation adjustment.
5	2029	11.5–14	LNG export demand sustains prices, renewable impact begins.
6	2030	12–15	Peak of medium-term forecast, supply-demand balance tightens.
7	2031	12.5–15.5	Gradual price growth, declining domestic gas production.
8	2032	13–16	Renewable transition reduces power sector demand.
9	2033	13.5–16.5	Stable LNG exports, inflation drives nominal price increase.
10	2034	14–17	Supply constraints offset by renewable substitution.
11	2035	15–19	Long-term price floor set by LNG netback, inflation at 2.5%.

Valuation Impact on 150 BCF 2P Reserves

Using the midpoint of the forecasted price range for each year and the methodology from the previous response (80% recovery, 60% net after costs, 50% NPV discount), the value of 150 BCF (158,250,000 GJ) of 2P reserves evolves as follows:

• 2025: Midpoint $11/GJ → Gross $1.74B → Net NPV ~$418M AUD.
• 2030: Midpoint $13.5/GJ → Gross $2.14B → Net NPV ~$513M AUD.
• 2035: Midpoint $17/GJ → Gross $2.69B → Net NPV ~$645M AUD.

Risks and Uncertainties

• Upside Risks: Global energy crises, delays in renewable rollout, or tighter east coast supply could push prices higher.
• Downside Risks: Faster renewable adoption, weaker Asian LNG demand, or new gas discoveries could depress prices.
• Policy Changes: Carbon pricing or export controls could alter domestic price dynamics.
• Data Limitations: Lack of specific 10-year Wallumbilla forecasts requires reliance on global proxies and netback trends, introducing uncertainty.

Final Answer

Wallumbilla Hub natural gas prices are projected to range from $10–$12/GJ in 2025 to $15–$19/GJ in 2035 (nominal terms), driven by LNG netback pricing, stable export demand, and moderate supply constraints, tempered by renewable energy growth. The value of 150 BCF of 2P reserves would rise from ~$418M AUD in 2025 to ~$645M AUD in 2035, assuming constant recovery and cost factors. For precise forecasting, consult industry reports or ACCC netback updates.