Following meetings with Federal Resources Minister Matt Canavan in Canberra yesterday, gas producers are expected to extend a deal offering uncontracted gas for domestic use before export.
In a move that could see LNG projects avoid government intervention, The Australianreported big gas players like Santos, Origin Energy and Shell are expected to recommitto the Australian domestic gas security mechanism, which would see them agree to make gas available at peak demand periods.
The deal gives the government the power to limit gas exports if it anticipates domestic shortfalls in the following year, with Senator Canavan having until 1 November to enact the trigger if low gas supply seems likely in 2019.
Escalating threats of intervention on exports by both major political parties in recent weeks was met with strong displeasure by gas industry chiefs; Santos CEO Kevin Gallagher said such plans would result in gas fields becoming uneconomic and “instead of more supply and lower prices, there will be even less investment and less supply”.
The publication reported that no deal was officially done in the meeting, with further talks to be had before a recommendation is made to the Prime Minister later this month.