Oz East Coast LNG Exporters Extend Domestic Supply Agreement

Australia’s east coast LNG exporters have extended their agreement with the Federal Government to maintain a secure supply of gas to the domestic region out to 2020, the minister for resources Matt Canavan said September 30.

The move follows the government in 2017 introducing the Australian Domestic Gas Security Mechanism which enables it to restrict LNG exports should there not be sufficient supply of gas at home. Subsequently, the regions LNG projects, Australia Pacific, Queensland Curtis, and Gladstone all agreed to ensure they’d keep the east coast market supplied for 2018 – and the new deal extends that commitment.

“As a government, we are working hard to lower energy prices. While industry and market-led solutions are an appropriate course of action to ensure gas availability, we will always put Australian businesses and families first when it comes to gas supply – no matter what,” Canavan said.

“Under the agreement, LNG exporters have agreed to offer uncontracted gas to the domestic market on reasonable terms in the event of a shortfall. This uncontracted gas will not be offered to the international market unless equivalent volumes of gas have first been offered to the Australian domestic gas market on competitive market terms,” the government said.

The Australian Petroleum Production and Exploration Association’s chief executive Malcolm Roberts said: “After 12 months, the results are unambiguously good. The market is well-supplied, prices have fallen sharply, large commercial and industrial customers are receiving multiple offers from suppliers”.

He added, though, that state and federal governments should do more to help develop new gas supply.

“More supply is the only sustainable way to deliver secure, affordable gas for families and businesses. It will also maximise the return to the community from the natural gas resources owned by all Australians – LNG exports earned [A]$31 billion [$22.23bn] in 2017-18 and are expected to reach [A]$48.4 billion by 2019-20,” he said.

“APPEA encourages all governments to focus on lasting solutions. It makes no sense for state governments to demand more and cheaper gas while supporting bans on local gas projects,” he said.