Synergy caught out by gas glut
Summary: Synergy has been forced to sell gas it bought to fire its power stations back into the market at a loss, in a move that has upset private competitors and could hit the utility’s bottom line.....
As the Eastern States grapples with an energy crisis induced by rapidly rising gas prices, WestBusiness can reveal that Synergy is facing a contradictory problem as it struggles to offload surplus gas.
It is understood Synergy has been selling gas into the South West market for significantly less than it paid for it.
Central to the problem is a multibillion-dollar, long-term take-or-pay contract entered into by Synergy with the Chevron-operated Gorgon project in the Pilbara in 2011.Kleenheat has amassed more than 130,000 customers - almost 30 per cent of the market.
“Synergy uses its gas volumes for a range of measures including its gas-fired generation units,” Mr Waters said.
“Those volumes are currently inclusive of those procured during Synergy’s transition from upstream suppliers.
“Synergy is a major retailer of gas to the large corporate and small business sectors and sells gas for a range of contract prices which are confidential.
“Unlike the east coast, WA industry is benefiting from lower gas prices.”