This article from today's Australian gives more reason for companies to take a hard look at Mungi.
AUSTRALIA'S biggest domestic gas supplier, Santos, has given its most bullish prognosis yet of east coast gas prices, saying they could triple on the back of unprecedented demand.
The company has also revealed it is stepping up its search for shale gas in the onshore Cooper Basin in Central Australia and hopes to achieve first production in 2015 -- the year it is targeting for first gas exports from Gladstone.
In a presentation to analysts at the company's Moomba gas plant in South Australia this week, Santos said $50 billion of planned coal-seam gas export plants planned for Gladstone, along with Australia's move to lower carbon emissions, had shifted the dynamics of gas demand.
"Gas prices will trend towards oil-linked parity (of) about $6 to $9 a gigajoule," Santos vice-president of eastern Australia, James Baulderstone, said.
Current east coast gas prices are between $3 and $4 a gigajoule, which is cheap by international standards.
The statements back reports that, because of strong demand for gas from the Gladstone projects, which are due to start producing in 2014 and 2015, Queensland's industrial gas users have had to agree to pay more than double current prices to secure long-term gas contracts.
Some suppliers are offering oil-linked gas prices that would cost the buyer $7 a gigajoule when international oil prices were at $US100 a barrel.
Santos chief David Knox has said gas prices above $6 per gigajoule could be enough to trigger shale gas production in the onshore Cooper Basin, which straddles the South Australian and Queensland borders.
In the presentation, Santos revealed it had formed production targets for shale gas and would embark on a big exploration program next year.
The Adelaide-based company said it planned to have shale gas reserves in 2013 and to achieve first production in 2015.
The gas export situation in Queensland has led the state's biggest domestic gas users, which include Rio Tinto, Orica, Incitec Pivot and Xstrata, to raise concerns about gas availability.
Xstrata has said prices were a major factor in its decision to shut its Mount Isa copper smelter by the end of 2016.
Origin Energy, BG Group and Santos are building three LNG plants at Gladstone and are also the major domestic suppliers.
Santos said gas price increases were affordable.
"Expected higher domestic gas prices are consistent with other energy and commodity price movements over the past decade," Mr Baulderstone said.
The company also highlighted the price surge in commodities such as coal and copper that were produced by some customers.
