The move comes amid rising pressure on the federal government to force Queensland’s three LNG exporters to divert more gas to the domestic market.
Santos and Beach Energy will spend tens of millions of dollars to drill extra wells in South Australia’s Cooper Basin as they bring on additional gas supply and seek to avert the threat of potential domestic price controls andThe partners on Sunday committed to bringing another drilling rig to the basin to drill the wells. Santos said the project should deliver another 15 terajoules a day of gas by the end of the year, with the first supplies due within the next few weeks.
Coal power plant outages across the National Electricity Market have increased demand for gas for electricity generation, just as a cold snap hits the south-east and drives up demand for gas for heating.the Queensland LNG ventures to divert gas from export to the domestic market to ensure adequate reserves of power generation.
“The pricing on Sunday of a megawatt is lower than the other four or five days a week ... and it’s far more consistent, so there’s less volatility,” said Mr Lawrence, who is also national president of the Australian Foundry Institute. Origin, which owns Australia’s biggest coal-fired generator, last week slashed profit guidance for its electricity and gas markets business after a worsening in the coal supply squeeze at its huge NSW power station, sending its shares sliding.