Gas majors in Australia threatened over domestic shortage

by SpeedLux
australia gas major threatened domestic shortage

Australia’s minister for resources stated on Sunday that the government would do something about it to avert an energy shortage if big gas producers did not enhance supply for the nation’s domestic market.

Australia is on track to become the world’s biggest exporter of liquefied gas (LNG), yet its energy market operator has cautioned of a domestic gas crunch from 2019 that could activate market supply cuts and broad power failures.

Significant gas manufacturers, consisting of Exxon Mobil Corp and Royal Dutch Shell, who have large export contracts, guaranteed to make sure gas was offered for the domestic market during crisis talks with the government this week.

“If the commitments are not fulfilled, if we do not see more gas, we’ll act, we’ll take choices in our national interest to secure our nation’s energy supplies,” stated Resources Minister Matt Canavan.

Australia’s power supply issues made worldwide headlines last week when Tesla CEO Elon Musk offered to save South Australia, the nation’s most renewable-energy dependent state, from blackouts by setting up large-scale battery storage.

Producers have long suffered tight gas materials and skyrocketing rates as producers have focused on providing gas to LNG plants that have locked in 20-year export contracts. Restrictions on drilling coal joint gas have contributed to supply restrictions.

Producers blame state drilling restrictions, uncertainty about Australia’s climate policy and, more recently, prospective increases in petroleum producer taxes, for discouraging advancement of new gas fields.

Canavan, who did not mention on what action would be taken, said the firms had given strong commitments to the government.

“This is what every country would do. The gas market understand that. That’s exactly what we need to see delivered,” he said.

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