Australian Gas Security Mech 'Won't Affect WA LNG Exports'

LNG exports from Western Australia will not be limited under the Australian Domestic Gas Security Mechanism (ADGSM), Matt Canavan, the national minister for resources and Northern Australia (pictured below) said June 27, one day the Australian government announced the mechanism.

The Australian government intends to implement a new mechanism to allow it to take temporary and targeted action to safeguard Australia's domestic gas supplies. The ADGSM is a temporary and targeted measure designed to ensure adequate gas supply on the Australian east coast. The ADGSM will enable the government to invoke controls on exports of LNG when there are reasonable grounds to believe there will be an insufficient supply of natural gas for Australian consumers in a forthcoming calendar year.

“Western Australia will not be disadvantaged by the mechanism,” the minister stated. 

Matt Canavan (Photo source: Australian government)

West Australian LNG exporters will receive an unlimited volume licence, so their exports won’t be restricted, even if a shortfall is declared on the east coast for a particular year.

The Australian government June 20 announced its decision to finalise new regulations, which will come into effect January 1 2018, to restrict LNG exports. It said its new mechanism will be "designed to ensure Australia’s LNG industry can continue to be a leading exporter, while at the same time domestic gas users have access to gas at a price on par with international markets."

Shardul Sharma