Canavan: Australia can’t repeat gas mistakes

Minister Canavan said a review of the government’s Australian Domestic Gas Security Mechanism (ADGSM) – introduced in July 2017 – had found it had helped stabilise the domestic gas market, with short term prices at the Wallumbilla Gas Supply Hub having fallen by around 46 per cent over the last two years.

The full review can be found here.

Minister Canavan said the ADGSM will remain in place until 2023, while the Australian Competition and Consumer Commission (ACCC) will continue to closely monitor the gas industry until 2025.

“I recognise that some businesses are still finding it difficult to get longer term gas offers and that some price offers remain higher than I want to see, especially when international LNG prices are low,” he said.

“I am going to work with states and territories during the next 12 months to consider options to establish a prospective national gas reservation policy.

“We can’t repeat the mistakes of the past in just letting our gas be shipped overseas with no thought to our domestic requirements.”

The review of the ADGSM recommended its guidelines should include the ACCC’s LNG netback price series as an indicator of how well the market was functioning, as well as strengthen the Total Market Security Obligation, which is its mechanism for securing domestic gas.

In December 2019, prices at Wallumbilla averaged $6.71/GJ compared to an average of $12.49/GJ in February 2017.

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

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