The Australian Government has signed a new Heads of Agreement with East Coast LNG Exporters to prevent a gas supply shortfall and secure competitively priced gas for the domestic market.
The negotiations ensure additional gas supply, improving security and affordability of domestic gas supplies in future years, while also introducing transparency measures to improve the information available to customers.
In July, the Australian Competition and Consumer Commission forecast a gas shortfall of 56 petajoules (PJ) for the domestic market in 2023.
The new commitments from LNG exporters will lead to an extra 157 PJ for the domestic market in 2023, with the gas to be supplied in line with seasonal demand.
The new Heads of Agreement includes:
- LNG exporters to first offer uncontracted gas to the domestic market, on competitive terms, with reasonable notice, before exporting;
- in respect of uncontracted gas, the principle that domestic gas customers will not pay more for the LNG exporters' gas than international customers;
- commits LNG exporters to offering gas on terms consistent with a code of conduct;
- enhanced transparency and accountability, with quarterly compliance reporting to the Minister for Resources, with oversight by the competition regulator the ACCC.
Minister King will meet every quarter with each east-coast LNG exporter to review whether they are meeting their individual commitments and ensure they are compliant with the Code.
The new Heads of Agreement was signed by Minister King and representatives from Australia Pacific LNG (APLNG), QGC Pty Ltd (operator of QCLNG), and Gladstone LNG (GLNG).
The Heads of Agreement is available at https://www.industry.gov.au/domestic-gas-supply.
Quotes attributable to Minister for Resources and Northern Australia Madeleine King:
"This agreement will ensure Australians continue to have access to secure and reliable gas.
"The new supply commitments, and Heads of Agreement, will deliver gas to the domestic market when needed, and ensures future uncontracted gas will be offered to the domestic market first, on competitive and reasonable terms, before it is offered for export.
"This is just one of a suite of measures being taken by the Albanese Government to deliver enduring improvements to the domestic gas market and strengthen the security of domestic gas users' access to affordable gas.
"Given the agreement means the projected shortfall will be avoided, I am satisfied I do not need to take steps to activate the Australian Domestic Gas Security Mechanism at this time.
"This is a great outcome for Australia, will strengthen confidence in the domestic gas market and safeguard our global reputation as a stable and reliable energy exporter to our regional partners.
"I thank the east coast gas producers for working with the government to resolve the forecast shortfall."
