Incitec Pivot lifts the lid as gas prices start to bite
Incitec Pivot has become the first of the big industrial gas consumers to lift the lid on the explosive increase in eastern state gas prices as the market responds to the $70 billion in LNG export gas projects being built at Gladstone in Queensland, according to The Australian.
The fertiliser and explosives group revealed yesterday that it had signed a new gas supply agreement for its Phosphate Hill fertiliser manufacturing plant near Mount Isa in Queensland that would result in its manufacturing costs soaring by $50 million annually for the 2015-16 calendar years, throwing doubts over the project's long-term viability and its 500 jobs.
The price spike, caused by strong Asian demand for the gas, would swamp Phosphate Hill's earnings capability, which is already under pressure from weak fertiliser prices, operational issues and a weaker but still comparatively strong dollar.
Carbon tax added 12% to some power bills
The former Labor government's carbon tax added as much as 12% to electricity bills in its first year of operation, according to the national energy regulator, reports The Australian.
In its annual review of the market, to be released today, the Australian Energy Regulator says the impact of carbon pricing, introduced in July last year, was highest in the ACT, where the tax added 12% to the average bill, followed by Queensland (9%), Victoria (8%) and NSW (7%).
Origin to sell more gas to Santos’ GLNG venture
Origin Energy has struck a second deal to sell gas to Santos’ Gladstone liquefied natural gas venture in Queensland, exposing the continuing need for the $US18.5 billion ($A20.9 billion) project to supplement its own gas with third-party supplies, according to the Australian Financial Review.
The latest accord, for at least 100 petajoules of gas over five years, is again linked to crude oil prices, demonstrating an increasing trend for east coast deliveries to be tied to international prices.
Under an option attached to the contract, Origin could supply an additional 94 petajoules of gas to GLNG, but has the flexibility to call back volumes into its own portfolio during periods of high gas or electricity demand.
