asia lng report from cs analyst , page-3

The big QLD LNG gas projects have Asian gas commitments locked up though as part of the investment process otherwise they wouldnt have got past FID without firm commitments. In this scenario then and regardless of where the world gas price ultimately ends up (understand also there are infrastructure concerns with US shale gas exports to Asia and Asian gas investors want portfolio gas interests across mutliple jurisdictions to maximise security of supply) we should see domestic gas prices rising on the eastern sea board, happening already in long term contracts, eroding the price difference between LNG and domestic gas prices. So really dont see the ultimate success of MEL being tied to the world gas price and the continued expansion of the LNG export industry- even if we get into production for the domestic gas market we are going to be multiples of the current SP, lets not forget ERM a domgas power generator is a significant shareholder.