The competition regulator has effectively accused big gas exporters of failing to supply enough gas to the domestic market. Gas producers disagree. Here’s what you need to know.
It wants the federal government to stop the exporters selling “excess” gas – or gas that isn’t already contracted to overseas buyers – into offshore markets next year, saying this will lead to a shortfall in domestic supplies.
Much of the gas produced in Australia’s east coast is produced by companies that are also LNG exporters. “If LNG exporters were to provide all of their excess gas to overseas markets, the east coast gas market would be facing a supply shortfall of 56 PJ.” , ConocoPhillips and Sinopec, Queensland Curtis LNG, which is led by Shell, and Gladstone LNG, which is operated by Santos, TotalEnergies, Petronas and Kogas. These three export ventures effectively control 90 per cent of known gas reserves on the east coast.Higher prices. Gas prices are surging around the world. Demand from offshore has increased because of the Russian invasion of Ukraine, which has forced European countries to stop buying Russian gas.
Exporters have also dramatically widened the spread of prices offered to domestic buyers from between $7 and $8, to between $7 and as much as $25. This is despite the fact that the estimated forward cost of production is steady at just over $5.Yes. A heads of agreement, often dubbed a “gentleman’s agreement” exists between the big producers and the federal government.
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