Australian government will decide whether to curb exports of LNG as Australian Competition and Consumer Commission (ACCC) has urged restrictions, warning one of the world biggest LNG suppliers could face a shortfall and soaring prices next year.
Australian government will decide whether to curb exports of LNG as Australian Competition and Consumer Commission (ACCC) has urged restrictions, warning one of the world's biggest LNG suppliers could face a shortfall and soaring prices next year.
The ACCC warned extra gas is needed to offset declining output at offshore fields that have long supplied the populous east coast, home to nearly 90% of Australia's population. A shortage of 56 PJ is now expected, equivalent to around 10% of demand, or 14 LNG cargoes.
The watchdog calls the government pull the trigger on the Australian Domestic Gas Supply Mechanism which set up in 2017 and can be used to force the east coast's LNG exporters to divert gas to the domestic market to avert shortfalls.
Export curbs would most likely impact the Gladstone LNG export venture which its upstream shareholders are Santos (operator) 30.0%, Petronas 27.5%, Total 27.5%, Kogas 15.0% and its LNG plant’s shareholders are Santos 30.0%, Petronas 27.5%, GIP Australia (GIP) 55.0%, Kogas 15.0%, according to the
Global LNG Database®.
The ACCC has not only predicted a shortfall in 2023 but also said it was "strongly encouraging LNG exporters to immediately increase their supply into the (Australian) market".
Resources minister Madeleine King said that she would consult with LNG exporters and Australia's trading partners before making a decision in October. The ruling could affect fuel supplies and prices in 2023 for global consumers already roiled by gas disruptions due to the war in Ukraine.
The ACCC report comes after gas demand surged for power generation due to coal-fired plant outages and for heating. Rocketing demand sparked a steep rise in prices for both gas and power and nearly led to blackouts in eastern Australia in June.
A global gas supply crunch has worsened in the wake of the Russia-Ukraine conflict. LNG buyers in Europe and Asia are competing for shipments to replace Russian gas, boosting prices and spurring Australia's producers to export uncontracted gas.
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