Australian gas output declining with limited pipeline capacity, leading to recommendation to curb exports
Australia’s competition watchdog for the first time has urged the government to curb liquefied natural gas exports, warning the east coast of one of the world’s biggest suppliers of the fuel could face a shortfall and soaring prices next year.
Gas output is declining at Australia’s offshore fields in the southeast that have long supplied the populous east coast, and pipeline capacity is limited to move gas south from where the LNG exporters are. “Our latest gas report finds that the outlook for the east coast gas market has significantly worsened,” ACCC Chair Gina Cass-Gottlieb said in a statement.
The ACCC report comes after gas demand surged for power generation due to coal-fired plant outages and for winter heating, which sparked a steep rise in prices for both gas and power and nearly led to blackouts in June. “It’s critical that our domestic gas supply is secure and competitively priced, particularly when households and businesses are under extreme pressure,” Chalmers said.Looking to stave off new regulations, such as a gas reservation policy, the gas industry’s lobby group responded to the ACCC’s call by highlighting that LNG exporters have 167 PJ of uncontracted gas available for the domestic market, as noted in the watchdog’s report.
Up to now, Resources Minister Madeleine King has said she does not want to interfere with long-term export contracts.
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