An extensive development of Australia’s undeveloped gas reserves and resources will be needed in order to meet the future domestic and LNG demand, chairman of the Australian Competition and Consumer Commission, Rod Sims, says.
A report of the ACCC inquiry into the competitiveness of wholesale gas prices in eastern and southern Australia reveals that there has been an “unprecedented change in the east coast gas market over the last four years with the development of LNG facilities in Queensland.”
Sims noted that the changes created winners and losers, with the industrial gas users being affected acutely by the transition.
Market participants have been affected by the introduction of LNG and the exposure to international gas pricing, the fall in oil prices which led to downturn in exploration and development and regulatory uncertainty and exploration moratoria, has created an increasingly complex environment.
Sims further added that “sufficient gas is currently forecast to be produced in the east coast gas market to meet domestic demand and existing LNG contract commitments until at least 2025, but there is uncertainty over the timing of some developments, particularly due to low oil prices.”
ACCC’s report made a number of recommendations to the Council of Australian Governments (COAG) Energy Council, as well as state and territory governments in order to try and alleviate gas market issues.
These include enabling new gas supply to come to market, new regulatory coverage of pipelines and the consistency and transparency of the provision of information to the market.
One such step has already been made by the ACCC by granting a five-year authorization to LNG projects on Curtis Island near Gladstone to discuss their maintenance schedules, maintenance providers, and maintenance techniques.
ACCC said that in case one of the facilities goes offline for maintenance, their gas can be supplied to the wholesale markets for sale.
LNG World News Staff