Shell has ended a six-week suspension on entering into new gas sales agreements under intense pressure from the government and regulators.
Shell has buckled to government pressure and will offer gas for sale.The intervention created a stand-off between the government and gas suppliers that paralysed the market, and the pressure intensified when the Australian Competition and Consumer Commission told suppliers to resume offering new supply contracts within one to two weeks or face compliance action.
“We are reviewing the guidelines the ACCC has released, and look forward to seeing the details of the new mandatory Code of Conduct, ahead of finalising sales agreements for next year,” the spokeswoman said. “We will continue to engage constructively with government on the Australian Domestic Gas Security Mechanism and Code of Conduct consultation. We need to shift from the current patchwork of competing and inconsistent regulatory interventions with their unintended consequences, to solutions which will deliver long-term energy security and prosperity for Australians.”
Sourcing new, cheap gas has been particularly onerous on small manufacturers such as NSW magnesium products maker Causmag International, which was asked to pay an eye-watering $39.67 a gigajoule for gas when it restarted its plant in Young in early January, under its DMO with retailer AGL. That is about four times higher than the $12/GJ cap on wholesale prices introduced last month.
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