Page 11 - AsianOil Week 31 2022

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Australia faces gas shortfall, high prices

in 2023, warns consumer agency

PERFORMANCE AUSTRALIA will next year face a gas short- gas if necessary. A move to restrict LNG exports
age and a steep increase in prices, prompting a by Australia might create further tightness in
forced reduction in exports if the government a global market that is already worried about
fails to take steps to ensure adequate supplies, a securing supplies in view of gas shortages
government watchdog, the Australian Compe- brought about by the war in Ukraine.
tition and Consumer Commission (ACCC), has Australian Resources Minister Madeleine A curb in exports
warned in a new report. King said she would discuss the country’s out-
Australia, which vies with Qatar and the US look with the country’s producers and foreign would most likely
to be among the world’s largest LNG exporters, customers before making a decision in October.
needs new sources of supplies to make up for A curb in exports would most likely have an have an impact
declining reservoirs from offshore fields that impact on the three export facilities located in
have fed gas to the East Coast, where around 90% Queensland – Gladstone LNG (owned by San- on the three
of Australians live. Three gas export facilities are tos, Petronas, TotalEnergies and Kogas), Aus- export facilities
located in the eastern state of Queensland, and tralia Pacific LNG (owned by Origin Energy) and
a large LNG export industry is located in the Queensland Curtis LNG (owned by Shell). The located in
north-west. three companies exported a combined 13.24mn
The population centres along Australia’s tonnes of LNG during the first half of 2022. It is Queensland.
south-eastern and southern coasts are expected expected that these plants will be processing and
to see a shortfall of 10% in the coming year. This producing an excess of natural gas over what is
is owing to a reduction in the use of coal and the needed for export in the coming year. But if gas
slow development of renewable alternatives. from these plants is to be diverted to domestic
Australia media have reported that domestic markets, it will be priced competitively.
gas prices have jumped by 400% and would have The ACCC has recommended that the gov-
gone higher if the Australian Energy Market ernment apply the Australian Domestic Gas
Operator, the regulator, had not imposed price Supply Mechanism, a measure drawn up in 2017
caps. designed to enable the government to order the
Canberra said it would examine the situa- diversion of LNG exports in order to keep the
tion and make a decision to redirect domestic domestic market supplied.™

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