News: STO Australia to revamp LNG supply agreements with three exporters

Australia plans to renegotiate domestic gas supply agreements with three liquefied natural gas exporters to include a price component, Prime Minister Scott Morrison said on Monday, as Canberra seeks to lower the price of gas to fuel a manufacturing recovery.

Australia in 2018 stuck deals with ConocoPhillips COP.N , Royal Dutch Shell RDSa.L and Santos (STO) , the operators of Australia's three east coast LNG plants, that mandated that each sell some gas into the domestic market instead of exporting it.

With those agreements soon to expire, Morrison said Australia will move to include a price element in any renewed deal, though he did not specify the exact details.

"As we turn to our economic recovery from COVID-19, affordable gas will play a central role in re-establishing the strong economy we need for jobs growth, funding government services and opportunities for all," Morrison said in an emailed statement.

Morrison also said Australia would consider requiring new gas projects to reserve a proportion of their gas specifically for the domestic market.

The proposal comes just weeks after Australia's consumer watchdog said Australian businesses are paying about 50% more for domestically produced gas than export customers are.

Morrison has earmarked cheaper gas as a major part of plans to revive the economy as COVID-19 pushes Australia into its first recession in three decades and leaves effective unemployment at more than 13%.