The Australian: Cooper’s got the strategy but needs to tap the gas

Give me a problem, and I’ll show you a small cap striving to make big profit from it. Just take the critical shortage of gas looming in NSW over the next 24 months.

The state currently receives 95 per cent of its gas from interstate: South Australia, Victoria and Queensland. These contracts are expiring over the next two years and suppliers are looking to lucrative export markets.

By 2020 gas supply to the domestic market is projected to be half of where it is now, and this quickly declines towards 10 per cent in succeeding years, if nothing changes.

“With a flick of the switch,” as Cooper Energy’s managing director and industry veteran David Maxwell puts it, “the market for gas on the east coast will treble”.

He is referring to the 1400PJ of supply coming on stream for the Gladstone liquefied natural gas projects in east Queensland.

Before Gladstone, gas was priced at about $3 a gigajoule in the market for Eastern Australia. Now the price has climbed to $5/GJ and some believe that it will eclipse the international price and climb as high as $10/GJ, reflecting the shortage of supply. MORE