Australia rules out curbs on gas exports after producer deal
Stock Markets 1 hour ago (Sep 29, 2022 12:56AM ET)
By Sonali Paul
MELBOURNE (Reuters) -Australia will not put curbs on gas exports after reaching a deal with its three east coast producers of liquefied (LNG) to avert a forecast supply crunch, Resources Minister Madeleine King said on Thursday.
The government threatened the export curbs in August, worrying Asian buyers and LNG investors, following a warning by the competition watchdog that the east coast market faced a shortfall of 57 petajoules of gas in 2023.
The pact unveiled on Thursday provides for Queensland Curtis LNG, run by Shell (LON:), Australia Pacific LNG, run by ConocoPhillips (NYSE:), and Gladstone LNG, run by Santos, to offer an extra 157 petajoules of gas to the domestic market next year.
“Given the agreement means the projected shortfall will be avoided, I am satisfied I do not need to take steps to activate the Australian domestic gas security mechanism at this time,” Resources Minister Madeleine King said in a statement.
The terms require the LNG exporters to offer uncontracted gas to the domestic market before international buyers and ensure domestic buyers will not pay more for uncontracted gas than customers offshore.
King said the pact would not affect supplies to overseas customers or existing contracts.
“I want to state, very firmly and clearly, that Australia will always be a trusted and reliable trading partner and a safe place to invest,” she told a televised media conference.
Santos’s GLNG, whose partners include TotalEnergies SA, Korea Gas Corp (KOGAS) and Malaysia’s Petronas, had been seen as the most vulnerable to export curbs.
This is because it is the only east coast exporter to take more gas out of the domestic market each year than it supplies.
GLNG agreed to step up domestic supply during Australia’s peak winter demand period, Santos said.
“The (agreement) is a good outcome for Santos and very welcome, to remove sovereign risk and ensure long-term LNG supply contracts are honoured,” its managing director, Kevin Gallagher, said in a statement.