Western Australia low energy price “paradise”

EnergyQuest has just released its September 2022 EnergyQuarterly  report.  One of our findings is that with energy prices at eye-watering levels around the world, we believe that Western Australia now has the lowest gas prices in the OECD. In Q2 US Henry Hub prices in the U.S. averaged A$9.48 per gigajoule (GJ) and the UK National Balancing Point price averaged A$28.93/GJ. Most European prices are similar to UK prices. Most North Asian prices are based on LNG imports. Canadian prices follow Henry Hub. In Q2 Santos average WA gas price was A$5.73/GJ and the WA spot price from gasTrading was A$5.54/GJ.  Wholesale gas prices increased by 5.0% qoq in Q2 compared to 52% on the east coast. Consumer gas prices as measured by the CPI increased by an annual 1.1% in Q2 2022 in Perth, compared with 6.4% nationally. Woodside’s average price for selling domestic pipeline gas spiked from A$3.53/GJ in Q2 2021 to A$13.72/GJ in Q2 2022, reflecting the merger with BHP Petroleum. A year ago Woodside only sold domestic gas in WA. It’s average domestic gas price now includes sales from Gippsland and the Gulf of Mexico.

Furthermore, WEM electricity prices averaged $64/MWh in Q2 compared to $284/MWh in the NEM. At these prices you would expect energy-intensive manufacturing industries to be falling over themselves to either expand existing WA operations or open new plants there. Alas, despite the best efforts of the WA Government, it does not appear to be happening. The WEM is also less emissions-intensive than the NEM. In Q2 coal was only 38% of WEM generation and renewables was 27% compared to 59% and 22% respectively in the NEM.

Further information on the EnergyQuarterly report, including the brochure with full table of contents, can be obtained by clicking here.