Media coverage

AUSTRALIAN Business today (extracts):
LNG IMPORT SCHEME RISKS GAS PRICE HIKE
Perry Williams - Colin Packham

A Victorian government-led proposal to underwrite LNG imports could hike domestic gas prices and introduce a fresh risk of political intervention in the market, investors and energy experts have warned. The push for the commonwealth to underpin importing LNG into Australia for the first time will be presented to federal and state energy ministers on Friday in a major intervention aimed at fixing looming gas shortfalls on the east coast.
However, the move faces significant opposition with the nation’s leading gas pipeline company, APA, concerned the decision to prop up imports may trigger a jump in local prices. The gas infrastructure player has floated its own $2bn plan to transport supplies from new sources at a cheaper cost than LNG terminals.
It pointed to the Australian winter Asian LNG spot price of $17.81 per gigajoule in 2024 and an average Australian summer price of $21.58/GJ. APA said that compares poorly with the federal government’s own Future Gas Strategy estimates for delivering gas from the Surat, Narrabri and Beetaloo basins to Melbourne for between $9 and $13 /GJ.
“We know that if Australia relies on imported LNG, it will set the price of gas for domestic users,” APA chief executive Adam Watson said. “Relying on imported LNG means burdening the domestic economy with significantly higher energy costs, impacting the competitiveness of our export industries and driving energy prices higher for small business and consumers. “This is exactly what the federal government was aiming to avoid when it established a $12 per gigajoule cap on wholesale gas prices in 2022. Imported LNG just takes us back to this.”
Energy experts also weighed in, concerned a new government intervention on LNG imports may distort the market following price controls, threats of “big stick” interventions and the export “gas trigger” which threatens to curb Queensland LNG exports in the event of local shortfalls.
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Shadow Minister for Resources Susan McDonald said federal Labor’s decision to stall approvals for new gas projects and freeze the release of new gas exploration acreages had resulted in a pending gas shortage in Australia.
“The concept that Australia, as a net exporter of gas, is having to consider importing LNG from overseas is the product of pure economic negligence. Australians need to ask themselves how, after three years of Labor, have we found ourselves in this situation,” Senator McDonald said.
Under the blueprint, the Australian Energy Market Operator would act as an anchor buyer of LNG likely from the two most advanced projects: Andrew Forrest’s Squadron Energy plant in Port Kembla, NSW, and Viva Energy’s Geelong facility, which is awaiting a decision in April from the Allan Labor government.
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Victoria – Australia’s most gas-dependent state – has sought to minimise demand to stave off the shortfall. It has offered concessional finance to households moving to switch to electric appliances but a cost-of-living crisis has dented its effectiveness.
The Victorian government insists switching to renewables will bring households substantial savings, and in a boost last week the federal government identified 56 projects that will receive priority status. The projects include 24 transmission, 32 generation and storage projects. The federal government said this equates to 16 gigawatts of wind and solar capacity and 6GW of storage.
While the projects identified do not secure automatic regulatory approvals, they are in line to receive an expedited response.