LNG producers warn of shortage of supply in Australia’s East Coast gas market
Reds Sims, chairman of the Australian Competition and Consumer Commission, said the unprecedented supply situation for next year underscores the importance of the new leaders’ agreement signed by the Australian government with LNG exporters in January 2021.
Under the terms of the agreement, LNG exporters must supply non-consolidated gas to the domestic market under international competitive terms and supply the appropriate materials to the ACCC to demonstrate their relevance.
In a statement on Tuesday, Sims said:
“Responses from LNG producers suggest that the southern states of Australia may soon be dependent on fossil fuels. We expect to see better compliance with engineers in the next 12 months.
According to the latest ACC report, gas prices for contract gas in the East Coast market remain below the 2020 target for February 2021.
However, a tightening of supply means that these prices may not last.
“In July, however, domestic land prices were driven by certain conditions that did not affect long-term contracts,” Sims said.
Fortunately, in August we saw some softening of these high space prices.
But while Sims says low prices are welcome, many consumers are struggling to find supplies beyond 2022.
“We are concerned about the recent shortage of gas supplies in the domestic market,” he said.
Treasurer Josh Friedenberg said the government will continue to ensure that domestic gas consumers get the best deals and prices remain affordable.
“The latest ACC report, along with recent gas market activity, highlights the need for gas-fired recovery to ensure good results for Australian households and businesses,” Friedenberg said.
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