Just saw this article titled: "We spoke to energy czar St Baker...

Just saw this article titled: "We spoke to energy czar St Baker on why it just piled into State Gas"
Australian energy security has been high on the list of talking points with the Albanese Government scrambling to secure more gas for domestic use on the east coast to – at the very least – put a cap on further price increases.There’s a good reason for this.According to the Australian Energy Regulator, east coast gas prices averaged between $28.81 per gigajoule in Brisbane to $29.74/GJ in Adelaide during the second quarter of 2022, roughly three times higher than it was during the last quarter.This has in turn impacted electricity prices with the quarterly electricity spot prices in the second quarter hitting their highest ever average prices from $228 per megawatt hour in Tasmania to $344/MWh in Queensland – which raises no end of questions given the preponderance of liquefied natural gas exporters in the latter state.The reasons for this sorry state of affairs could fill an article or three all on their lonesome but can likely be condensed into the following points: Years of underinvestment in gas exploration and development, geopolitical tensions, and governments on both sides of the political divide letting gas exporters have their merry way.So when an investment fund that has historically invested hundreds of millions (if not billions) into Australia’s gas infrastructure makes a substantial investment into a junior gas explorer, people tend to sit up and take notice.And that is exactly what happened when the St Baker Group increased its stake in State Gas (ASX:GAS) from 3% to 12% by pumping in close to $7m to fund the explorers gas commercialisation plans.St Baker – run by energy entrepreneur Trevor St Baker who founded ERM Power, which was sold to Shell for $617m in 2019 – is supremely familiar with Australia’s gas landscape, having been involved in the construction of over 2,500MW of new gas-fired power generation over the decade to 2009, laying over 300km of gas pipeline and entering gas purchase contracts worth $10bn.The fund also has a strong presence in the electric vehicle sector with a focus on the infrastructure necessary for the electrification of transport networks as evidenced by its investments in leading ultra-fast charger manufacturer Tritium and Evie Networks, which is building an EV charging network across Australia.State Gas itself is no mere gas explorer given that its executive chairman Richard Cottee is a veteran oil and gas executive who grew QGC from a $30m market cap into one of Australia’s major coal seam gas players prior to its $5.75bn acquisition by BG Group.
Explaining the State Gas investmentwith the strong interest in this deal, * took the opportunity to sit down for a chat with Trevor St Baker to find out a bit about the why behind the investment and some of his views on Australia’s energy sector.St Baker, who described himself as a “patient, small investor in State Gas” prior to the recent deal, noted that Queensland and Australia needed more gas and when the company, which has been progressively proving up its natural gas and coal seam gas deposits, put forward concrete commercialisation plans, it spurred him to act.“They’ve had some recent successes with this horizontal drilling but what really prompted me to respond with a further investment is that they’re now going to market, and they’ve got a pathway to market both in respect of this compressed natural gas trucking and then the building of a 50km pipeline to connect to the State’s pipeline,” he explained.State Gas recently successfully intersected its Rougemont-2 well with the first horizontal section (lateral) of its Rougemont-3 well and unveiled plans to start trucking CNG from its Reids Dome gas field in the first quarter of 2023 to help meet current market shortfalls while work begins on a large capacity pipeline, which could increase gas sales by 15 times.“They are actually investing in selling their gas and the revenue from that will contribute to the funding of the pipeline and the full development of their gas resource at a time when the state and the country is so hugely short of gas as reflected in the high price, which is what prompts us to capitalise on the high price with more supply,” St Baker added.