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Energy giant Santos’s international partners in a Queensland gas project fear their countries’ energy security will be put at risk if the federal government restricts exports to boost domestic supplies, and warn the move could harm Australia’s future investment appeal.
The national consumer watchdog this week warned households and business across the eastern seaboard were facing a 10 per cent gas shortfall next year, leading Resources Minister Madeleine King to threaten to cap exports of liquefied natural gas (LNG) unless gas companies demonstrate they will plug the gap.
Australia’s east-coast LNG joint ventures are seeking to assure the market that they will supply enough gas to avert the threat of any shortfall next year.Credit:AP
The Santos-controlled GLNG project in Gladstone, one of the three Queensland LNG joint ventures, has written to the Albanese government arguing that imposing unprecedented export controls under the policy known as Australian Domestic Gas Security Mechanism (ADGSM) was not the best way to address the challenges facing the market and may have “unintended consequences”.
Two of GLNG’s venture partners, Malaysian national oil company Petronas and South Korea’s Kogas, had invested a combined $14 billion in developing the Gladstone project to ensure energy security for their countries, the submission said.
“If GLNG’s production is curtailed through ADGSM, the energy security of these two countries will be put directly at risk. This is why, since 2017, these entities and countries have been watching the government’s position on this issue very closely.”
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The Australian Competition and Consumer Commission on Monday said the shortage of 56 petajoules expected in 2023 was the largest since it began its inquiry into the gas market in 2017, and raised fears of rising bills for homes with gas heaters and gas-reliant manufacturers already struggling to remain viable.
It said LNG exporters were contributing to the forecast 56-petajoule shortfall by planning to withdraw 58 petajoules more gas from the domestic market than they expected to supply.
“This could place further upward pressure on prices and result in some manufacturers closing their businesses,” ACCC chair Gina Cass-Gottlieb said.