Australia flags supply worries if LNG producers export all uncontracted gas
Updates with further details
Jan 27 (Reuters) -Australian liquefied natural gas (LNG) producers have sufficient uncontracted gas to prevent a domestic shortfall, but the country's east coast gas market could see a supply deficit if the producers export all their gas, a regulator said on Friday.
The Australian Competition & Consumer Commission (ACCC) expects a supply shortfall of 30 petajoules (PJ) in the country's east coast gas market this year, should the LNG producers export all of their uncontracted gas.
"The east coast gas supply forecast for 2023 has improved, but the outlook remains uncertain as the LNG producers haven't yet committed sufficient volume under firm contracts to address the risk of a domestic shortfall," said ACCC Chair Gina Cass-Gottlieb.
The ACCC report comes after its warning last year, saying that extra gas was needed to offset declining output at offshore fields that have long supplied the populous east coast, home to nearly 90% of Australia's population.
Australia's east coast is expected to produce 1,983 PJ of gas in 2023 wherein most of the gas is expected to be exported overseas by three LNG ventures in Queensland under long-term contacts, according to the ACCC report.
The three LNG producers, who have been net withdrawers of gas from the domestic market for the last couple of years, have worsened the gas shortfall, the report said.
Australia had said in December it will cap coal and gas prices for a year in attempt to ease utility bills for households and businesses hit by soaring costs amid Ukraine conflict, a move that could deter future investment in supply driving down prices in long run. nL1N32Z07M
Reporting by Navya Mittal in Bengaluru; editing by Uttaresh.V
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.