Gas cartel breaks as evil Santos burns
My god, it has taken 15 years for the MSM to catch on, but it finally has. From the time-warped ABC. “All roads lead to Santos’s GLNG project,” says Saul Kavonic, head of energy research at MST Financial. Kavonic, one of Australia’s most respected oil and gas analysts, says the tensions stem from the once-in-a-generation The post Gas cartel breaks as evil Santos burns appeared first on…
Australia's gas market has been plagued by tension and malinvestment, with the Santos-led GLNG project at the center of the chaos. Three giant LNG plants were constructed on Queensland's Curtis Island, each with two trains capable of liquefying natural gas for export. However, only two plants had sufficient gas to meet their overseas commitments and supply domestic customers.
Santos, the operator of GLNG, was aware that opening the eastern market to exports would lead to upward pressure on gas prices, but initially assured the public that it would not divert gas from local markets. In reality, Santos knew this was a premeditated market failure, designed to produce malinvestment and create an energy transition problem.
The government should have bought Santos while it was cheap and shut down one of its LNG trains, but instead, Santos exploited the overbuilt export capacity for its own gain. The GLNG project is now Australia's only gas problem, contributing to productivity and inflation issues. It has also driven up energy prices, creating a political vacuum that has allowed unsavory ideas and policies to emerge. The decline of Bass Strait and the ongoing battle with Iran will only exacerbate these issues.
Written by urgent.news from MacroBusiness's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
