There are a lot of errors in that article.
For a start, the only gas feeding Gladstone at the moment is coming from Fairview, Spring Gully and Undulla Nose. So you can't average all the fields to get an average price, it's only coming from the sweet spots. That's an average of $4 from his figures, not $5.50. So knock at least 1 USD off the cost already.
Secondly, those costs will have dropped since his Feb 2015 figures like everything else in the industry. You've got 18 months of cost cutting.
Thirdly and most crucially, the price they are reporting is based off the JCC price in the previous quarter (Apr-Jun), which is based off the import price in the quarter before that (Jan-Mar). So they are getting LNG prices from when oil was, on average, about $35/bbl and got into the 20s for a while there. Expect to see that received price go up next quarter because oil averaged about $45/bbl over that period.
It's a decent attempt by the guy, much better than you usually see in these anti-gas rants. But the assumptions going into his model are wrong, so the conclusion he reaches is also wrong.
That's not to say there's not some truth to the message though - these are high-cost plants operating on a low-price environment. They are going to struggle to be profitable once they move off the sweet spots if oil stays under $50.
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