National Australia Bank said in its latest Minerals & Energy...

National Australia Bank said in its latest Minerals & Energy Outlook for November that the recent surge in global oil prices would inevitably flow through to Australian LNG export prices, which "on balance is bad news for domestic gas consumers".

With most Australian LNG export prices tied to rising oil prices, NAB now expects export prices to exceed $10/GJ by mid-2018.

While lower temperatures and the resulting reduced gas power generation, combined with the LNG producers making good on their promises, has pushed domestic spot gas prices down somewhat since the first quarter, they've still exceeded export prices.

Netback domestic prices should be lower than export prices due to the costs of liquefaction from first principles, and while contract price data is not generally made public, reports suggest contract offers have fallen somewhat in the past few months.

Though Santos and Origin Energy have both diverted gas from their respective LNG projects and announced other supply deals to the point where the feds have dropped the threat of the Australian Domestic Gas Security Mechanism, NAB said "the days of $2-4/GJ gas in Eastern Australia are now well and truly over".