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Morrison deals with LNG exporters

Prime Minister Scott Morrison has signed an agreement with Australian LNG exporters that will see uncontracted gas offered to the domestic market first.

Minister for Resources, Water and Northern Australia Keith Pitt said the new Heads of Agreement (HOA), signed by Mr Morrison and east coast exporters Australia Pacific LNG, Queensland Curtis LNG and Gladstone LNG and falling under the government’s JobMaker plan, will ensure Australian businesses don’t experience a shortfall in supply at the expense of exports.

“The strengthened HOA commits LNG exporters to offer uncontracted gas to the domestic market first on competitive market terms before it is exported,” he said.

“It complements the Australian Domestic Gas Security Mechanism which also references the Australian Competition and Consumer Commission (ACCC) LNG netback price series.”

While Mr Morrison said gas was “critical” to Australia’s economic recovery and touted the downward pressure the new HOA would have on domestic prices, the Australian Workers Union (AWU) has taken aim at the deal, calling it a “spineless capitulation”.

“By rejecting price controls, or any other measures to ensure Australian gas reaches Australian employers at a reasonable price, Mr Morrison’s deal is basically identical to the weak and pointless bargain negotiated by Malcolm Turnbull,” said AWU National Secretary Daniel Walton.

“This deal sells out Australian manufacturing workers to benefit a handful of multinational giants who extract our gas and export it to Asia.

“The only difference between Turnbull’s backdown and Morrison’s is Malcolm preferred his gas boss photo opps in boardrooms with cups of tea, and Scott prefers high-vis dress ups.

“But the result for workers is exactly the same.”

The Federal Government said it would also continue with its commitment to unlock new gas supplies in the Beetaloo, Bowen and Galilee basins in Australia’s north, calling affordable gas a “critical component” of its Modern Manufacturing Strategy.

Domestic gas prices have continued to be an issue on Australia’s east coast as the ACCC has repeatedly warned of potential supply shortfalls in the next few years, despite Australia being one of the world’s top LNG producers.

A report from the consumer watchdog in August 2020 found domestic gas users on the east coast were paying significantly more than export parity prices, with ACC Chair Rod Sims saying he was “concerned” by the widening gap.

For more information visit the Department of Industry, Science, Energy and Resources website.

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