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Australia faces gas shortfall, high prices in 2023, warns consumer agency
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AUSTRALIA will next year face a gas short- age and a steep increase in prices, prompting a forced reduction in exports if the government fails to take steps to ensure adequate supplies, a government watchdog, the Australian Compe- tition and Consumer Commission (ACCC), has warned in a new report.
Australia, which vies with Qatar and the US to be among the world’s largest LNG exporters, needs new sources of supplies to make up for declining reservoirs from offshore fields that have fed gas to the East Coast, where around 90% of Australians live. Three gas export facilities are located in the eastern state of Queensland, and a large LNG export industry is located in the north-west.
The population centres along Australia’s south-eastern and southern coasts are expected to see a shortfall of 10% in the coming year. This is owing to a reduction in the use of coal and the slow development of renewable alternatives. Australia media have reported that domestic gas prices have jumped by 400% and would have gone higher if the Australian Energy Market Operator, the regulator, had not imposed price caps.
Canberra said it would examine the situa- tion and make a decision to redirect domestic
gas if necessary. A move to restrict LNG exports by Australia might create further tightness in a global market that is already worried about securing supplies in view of gas shortages brought about by the war in Ukraine.
Australian Resources Minister Madeleine King said she would discuss the country’s out- look with the country’s producers and foreign customers before making a decision in October.
A curb in exports would most likely have an impact on the three export facilities located in Queensland – Gladstone LNG (owned by San- tos, Petronas, TotalEnergies and Kogas), Aus- tralia Pacific LNG (owned by Origin Energy) and Queensland Curtis LNG (owned by Shell). The three companies exported a combined 13.24mn tonnes of LNG during the first half of 2022. It is expected that these plants will be processing and producing an excess of natural gas over what is needed for export in the coming year. But if gas from these plants is to be diverted to domestic markets, it will be priced competitively.
The ACCC has recommended that the gov- ernment apply the Australian Domestic Gas Supply Mechanism, a measure drawn up in 2017 designed to enable the government to order the diversion of LNG exports in order to keep the domestic market supplied.™
A curb in exports would most likely have an impact on the three export facilities located in Queensland.
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