Oil and Gas News

ScoMo backs LNG producers to drive east coast supply

Prime Minister Scott Morrison has signed an agreement with east coast liquefied natural gas (LNG) companies to ensure more gas is offered to the domestic market, more often, and on more competitive terms.

The heads of agreement (HOA) was also signed by LNG exporters, including Australia Pacific LNG, Queensland Curtis LNG and Gladstone LNG to help secure competitively priced gas supply for the east coast market until at least 2023.

Morrison said cheaper and more reliable energy was central to Australia’s economic recovery and the government’s JobMaker plan.

“Gas is critical to our economic recovery and this agreement ensures Australian businesses and families have the gas supply they need at the cheapest possible price,” Morrison said.

“This is about making Australia’s gas work for all Australians, while also supporting economic growth and backing important regional jobs in our expanding LNG sector.”

As part of the JobMaker plan, the government is delivering more Australian gas were it is needed at an internationally competitive price.

Federal Minister for Resources, Water and Northern Australia Keith Pitt said the strengthened agreement committed LNG exporters to offer un-contracted gas to the domestic market first on competitive market terms before it is exported.

“It complements the Australian Domestic Gas Security Mechanism which also references the Australian Competition and Consumer Commission (ACCC) LNG netback price series,” Pitt said.

“Both the AEMO and ACCC have found east coast of Australia has a low, but increasing, risk of facing a gas shortfall. We are working to get the right balance between affordable gas for manufacturers and a price that encourages new gas resource development.”

The government is also continuing with its commitments to unlock new gas supplies through the Strategic Basin Plans with the Beetaloo Basin plan finalised and work progressing on unlocking gas in the North Bowen and Galilee Basin.

Pitt previously announced a commitment to provide up to $50 million for exploration that occurs before June 30, 2022 in the Basin along with $173 million for road upgrades to support the development of a gas industry based on Beetaloo gas resources.

“The Beetaloo has the potential to mirror the US shale gas revolution – bringing jobs and investment to the North while providing secure and affordable gas supplies to industry,” Pitt said.

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