Australian Energy Producers Chief Executive Samantha McCulloch
The Federal Government’s proposal to require LNG exporters to supply 20% of export volumes into the domestic market raises significant concerns about the potential impacts on competition, investment and future gas supply.
Forcing Queensland LNG exporters to supply 20% of export volumes into the east coast market would crowd out smaller domestic producers, reduce competition and impact future supply. 20% of export volumes represents around 60% of the east coast gas market.
There is no justification for such heavy-handed intervention when the east coast market is currently well supplied and prices are the lowest they’ve been in years, with Australian gas users insulated from the global energy crisis.
For years, the ACCC and AEMO have said that the answer to projected gas shortfalls is to remove barriers to investment in new supply. This announcement risks chilling investment with long-term consequences for Australia’s energy security.
It also risks undermining our reputation as a reliable trading partner at a time when our LNG exports are critical for regional energy security. The Prime Minister has rightly acknowledged the strategic importance of our LNG export relationships for Australia’s liquid fuel security.
The gas market review was the opportunity to reset the east coast gas market and restore investor confidence. But today’s announcement ultimately creates more questions than answers.
Australian oil and gas producers will continue to engage constructively with the government on a sustainable, prospective gas reservation framework that supports investment and provides certainty for gas producers and users.