Ministerial roundtable works on reducing gas prices and ensuring supply

Securing a reliable domestic gas supply for Australian users was the focus of an energy roundtable held at Parliament House today.

Minister for Resources Matthew Canavan called the meeting of more than a dozen major gas users and peak bodies as part of his ongoing consultation on the Australian Domestic Gas Supply Mechanism (ADGSM).

“Australia has a strong manufacturing sector which supports thousands of jobs across the nation, but in order to maintain those manufacturing jobs, we need affordable access to energy and gas,” Minister Canavan said.

“The Coalition’s strong action on shoring up domestic gas supplies and working cooperatively with gas users, suppliers and peak bodies is already paying dividends. Just 12 months ago, gas prices were surging.

“Over the past year government action, including the establishment of a gas export control framework, has helped reduce gas prices by 25 per cent, and offer prices by over a half.

"Last year a gas shortfall had been predicted for 2018. Now, the ACCC and the Australian Energy Market Operator (AEMO) is outlining a positive outlook, with forecasts that Australia will not experience a gas shortfall this year.

“I tested these forecasts with gas users at today’s roundtable, to hear firsthand about the issues they are experiencing with gas supplies.

“The Federal Government has not made a decision on the control of gas exports next year. I will go to the gas producing companies to see what actions they can take to secure the thousands of jobs in our manufacturing sector into the future.

“Today’s roundtable was a prime opportunity to develop some practical ideas to lock in security of supply and keep a lid on prices. Some issues we could look at include options for increasing the number and type of offers, pricing and the ongoing lack of an effective price discovery mechanism in the market.

“Encouraging the states –particularly Victoria - to develop their own resources to bring on more supplies is also critical. Their unscientific ban on gas development doesn’t just hinder the development of their own state, it stifles growth right around the nation."

Background

Under the ADGSM there are a number of steps the Minister must undertake – if there is a belief a gas supply short fall is likely to occur - before export controls can be imposed for the following year, including making a notification of intent to make a determination on the state of the domestic gas market before 30 September. As part of this notification, the Minister can formally request information from LNG projects on their gas production outlook and planned export volumes, and from large gas users on their planned gas use and experiences with securing supply. A determination must then be made before 1 November 2018, on whether there will be a gas shortfall in 2019. If the Minister finds the domestic market is in shortfall, export permissions will be required by LNG exporters to continue to export LNG in a relevant market for the 2019 calendar year.

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