Manufacturers are demanding more gas as new supply offers falter

“I think a few of them [LNG exporters] were a bit wary — they were waiting to see what the new rules were,” Richards said. “Nevertheless, they should be offering gas out there.”

Loading

Global energy giant Shell last week ended a freeze on new contracts, telling customers it would make available an additional 8 petajoules of wholesale gas supplies for 2023 through its Queensland gas business, QGC, in line with the government’s $12 price cap.

AGL, one of Australia’s largest gas retailers, said it believes gas shortages are likely in 2023 and is considering the terms of Shell’s bid to sell additional supplies.

“With a decline in domestic production, we also expect a deficit on the gas market,” said a company spokesman.

“AGL is currently reviewing the terms of Shell/QGC’s expression of interest process for the sale of $12 per gigajule gas,” AGL’s spokesman said.

Loading

The Australian Petroleum Production and Exploration Association (APPEA), an industry group representing large gas producers, said the ACCC’s report shows the need to develop more sources of supply, particularly in Australia’s southern states, where years of restrictive policies and moratoria on onshore Drilling continues towards new gas projects to replace rapidly declining production from legacy gas fields in Bass Strait and elsewhere.

“The report … shows that gas demand in the southern states is expected to exceed production from southern state gas wells by 52 petajoules, reinforcing the need for Victoria and NSW to develop their own resources rather than relying on Queensland for everything.” to do the heavy lifting,” said APPEA executive director Samantha McCulloch.

The Energy Users Association of Australia said the report reiterated the need for an emergency price cap and a binding code of conduct for the gas industry to ensure a “fair and balanced domestic gas market for all participants”.

“The ACCC report finds that the vast majority of contracted and uncontracted gas reserves are in a cost range between $5 per gigajoule and $10 per gigajoule, meaning that even with an emergency price cap of $12 per gigajoule, most Gas is sold at a good price on margin and no gas is sold at a loss,” Richards said.

The Business Briefing newsletter delivers important stories, exclusive coverage and expert opinions. Sign up to receive it every weekday morning.