28 May 2015
Gas exporters reject fresh calls for domestic reservation
Queensland’s gas giants have poured cold water on moves to establish a domestic gas reserve despite concerns a surge in exports of the fuel will drive up local prices.
Santos, QGC and Australia Pacific LNG, the three companies developing the huge Curtis Island liquid natural gas project, yesterday said there was no evidence that a so-called domestic gas reservation scheme would result in better deals for local manufacturers and other customers.
The Australian Workers Union this week pressured ALP leader Bill Shorten at the ACTU Congress to support a domestic reserve with claims Australian gas prices are projected to triple as a result of LNG exports ramping up from July this year.
“I have never seen a reservation scheme achieve anything of significance,” Santos’ Queensland vice president Trevor Brown told a Committee for Economic Development of Australia forum in Brisbane on Wednesday.
“The best way to improve prices for customers is to encourage more exploration, resulting in a stable and affordable supply of gas.”
The Western Australian Government is the only state to have a gas reservation policy, aiming to secure domestic LNG commitments up to the equivalent of 15 per cent of each gas export project.
Australia Pacific LNG chief executive Page Maxson said increasing the transparency of the market rather than establishing a reserve was the best way to make gas prices competitive.
“Gas reserves have not been very effective,” Mr Maxson said. “The US got to become the largest LNG market by improving transparency.”
He added claims that gas exported was being sold at a cheaper price than domestic supplies was a furphy.
“The fact that the gas has to be shipped overseas means the price will always be higher,” Mr Maxson said. “Australia has a competitive market for gas.”
Santos’ GLNG project and Australia Pacific LNG have indicated they will soon ship their first gas from their Curtis Island plants. QGC shipped its first gas late last year.
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