Demand for gas grows due to its status as a clean fuel
Melbourne, Australia (PRWEB) April 05, 2013
Australia has about 86,333 kilometres of gas reticulation pipelines and the total amount of natural gas available for distribution through the mains in 2012-13 is expected to be about 965.7 petajoules.
The Gas Supply industry consists of gas retailers, who buy and sell gas, and gas distributors, who operate the distribution networks that carry gas to end users. The industry is expected to generate revenue of $10.6 billion in 2012-13, up from $7.73 billion in 2007-08, equating to growth of about 6.5% per year over that five-year period. Industry revenue is expected to increase by 13% in 2012-13, reflecting higher gas prices (due partly to the introduction of the carbon tax) and a moderate increase in the volume of gas consumed. The industry is expected to generate about 0.2% of Australia's GDP and net profit is expected to total $834 million. Although Australia does export liquefied natural gas (LNG), that trade occurs in the Oil and Gas Production industry. According to IBISWorld industry analyst M. Williams, “as the Gas Supply industry does not engage in international trade, the size of the local market matches industry revenue”.
The Gas Supply industry is capital intensive, relying heavily on assets such as pipelines, while employment numbers are relatively modest, at 2,099 people in 2012-13. The industry, which consists of 106 establishments, is expected to pay $225.9 million in wages this year. Firms involved in gas distribution are regulated, due to the regional monopoly characteristics of operating a system of gas mains. In contrast, gas retailers are able to compete freely. Increasingly, these firms have become multi-state and multi-fuel operators. Most gas retailers also sell electricity.
The volume of gas supplied through the mains distribution system is expected to increase over the five years ending in 2017-18. “Although gas prices have increased in response to the introduction of a carbon tax in mid-2012, the increases will be lower than for other, more carbon-intensive fuels, such as coal”, says Williams.
The Gas Supply industry has a moderate level of concentration. Prior to the breakup of gas utilities in Victoria, the industry was highly concentrated, with just one or two large players operating in each state. This situation changed radically, due to the application of competition principles, greater interstate trade, corporatisation and privatisation. The industry’s four largest operators are AGL Energy Limited, Origin Energy Limited, SPI (Australia) Assets Pty Ltd and Envestra Limited.
For more information, visit IBISWorld’s Gas Supply report in Australia industry page.
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IBISWorld industry Report Key Topics
Firms in this industry distribute natural gas to end users via a system of pipes, known as mains. Firms may also distribute manufactured town gas or liquefied petroleum gas.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
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