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    Oz PM Hopes for a 'Gas-Fired Recovery'


Prime minister Scott Morrison has outlined measures to boost the gas industry.

by: Shardul Sharma

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Oz PM Hopes for a 'Gas-Fired Recovery'

Australian prime minister Scott Morrison on September 15 said that gas would help re-establish a strong economy as part of his government’s JobMaker plan, making energy affordable for families and businesses and supporting jobs as part of Australia’s recovery from the Covid-19 recession.

Morrison said the government would reset the east coast gas market and create a more competitive and transparent Australian gas hub by unlocking gas supply, delivering an efficient pipeline and transportation market, and empowering gas customers.

The government plans to get more gas into the market by setting new gas supply targets with states and territories and enforce potential “use-it or lose-it” requirements on gas licences. It also plans to work on unlocking five key gas basins starting with the Beetaloo Basin in the Northern Territory and the North Bowen and Galilee Basin in Queensland, at a cost of A$28.3mn (US$20.7mn) for the plans.

Morrison said the government was looking to avoid any supply shortfall in the gas market with new agreements with the three east coast LNG exporters that will also strengthen price commitments. It is supporting Commonwealth Scientific & Industrial Research Organisation’s (CSIRO) Gas Industry Social and Environmental Research Alliance with A$13.7mn.

The government is also exploring options for a prospective gas reservation scheme to ensure Australian gas users get the energy they need at a reasonable price, Morrison said.

Boosting transport network

The government is also working on ways to enhance the country’s gas transport network. It intends to identify priority pipelines and critical infrastructure as part of an inaugural National Gas Infrastructure Plan (NGIP) worth A$10.9mn that will highlight where the government will step in if the private sector does not invest.

Morrison said his government was reforming the regulations on pipeline infrastructure to promote competition and transparency as well as improving pipeline access and competition by kick-starting work on a dynamic secondary pipeline capacity market.

Empowering customers

In order to empower gas consumers, the government will establish an Australian gas hub at Wallumbilla in Queensland to deliver "an open, transparent and liquid gas trading system," Morrison said.

The government also plans to level the negotiating playing field for gas producers and consumers through a voluntary industry-led code of conduct, to be delivered by February 2021. Morrison said his government would ensure Australians are paying the right price for their gas by working with the regulator to review the calculation of the LNG netback price which provides a guide on the export parity prices.

“To help fire our economic recovery, the next plank in our JobMaker plan is to deliver more Australian gas where it is needed at an internationally competitive price,” the prime minister said. “We’ll work with industry to deliver a gas hub for Australia that will ensure households and businesses enjoy the benefits of our abundant local gas while we hold our position as one of the top global LNG exporters.”

Gas is part of the government’s plan to reduce emissions without imposing new costs on households, while at the same time creating jobs, growing businesses and the economy, he said.

The prime minister said his administration would also work with state governments through a programme worth up to A$250mn to accelerate three critical projects – the Marinus Link, Project Energy Connect and the VNI West interconnectors.

Industry welcomes the move

The Australian Petroleum Production and Exploration Association (Appea) welcomed the announcement and called it a good first step in reinvigorating Australia’s oil and gas industry.

“Today’s announcement is a good first step to reinvigorate Australia’s oil and gas industry, which will be important to help power Australia’s economic recovery,” said Appea CEO Andrew McConville.

McConville said Appea and its members would work with the government as it looks to extend the heads of agreement with the three east coast LNG producers.  “The government’s plan recognises there is no silver bullet to driving down gas prices and that several steps need to be taken.”