EUAA Submission: ACCC Review of LNG Netback Price Series
Emily Wood | April 12, 2021
‘… We welcome the opportunity to provide a submission on the calculation of the LNG netback price series. The publication of the series has provided much needed transparency around what the ACCC describes as ‘an indicative reference price’1. The ACCC sees it as a ‘relevant price marker in negotiations for domestic supply’ subject to some qualifications and regularly reports on how offer prices differ from it as evidence of the lack of a competitive market.
This submission provides comments on the range of questions asked by the ACCC in its Issues Paper with particular focus on those around length of the forward netback series, LNG price and LNG plant costs. In particular we propose three key changes:
1. Tenor – Extending the forward price series beyond the current two year maximum to at least 5 years and out to 10 years if possible
2. Marker – Developing LNG netback prices series based on both JKM (to reflect what is happening now) and Henry Hub (to reflect what we expect to happen in the near future)
3. Costs – That costs associated with Gladstone LNG plant capex and fixed opex as well as pipeline capex also be deducted in the LNG netback calculation …’
Please download attachment to read full submission.
