Australian energy ministers have said local gas production should be the mainstay of the domestic market to avoid shortages as the forecast for 2023 and 2024, increasing pressure on exporters to increase local supplies.
The comments from ministers from the two most populous states, New South Wales and Victoria, came as Resources Minister Madeleine King is considering whether to restrict exports from three liquefied natural gas (LNG) export plants on the East Coast. run by Shell Plc, ConocoPhillips, and Santos Ltd.
On Friday, ministers held a second round of talks with Energy Secretary Chris Bowen on gas supply and energy market reforms following the energy and gas crisis in June.
“It’s fair to say the challenges remain. Challenges remain this year, they remain next year, into the immediate future,” Bowen told reporters after the meeting.
Ministers agreed to give Australia’s energy market operator the power to equalize gas reserves in underused storage facilities ahead of winter 2023 and required it to draw up a winter readiness plan for the east coast every year.
“We produce more than sufficient gas to meet our needs, but the problem is too much of it has been allowed to be exported at our own cost, and that’s got to change,” said Victoria state energy minister Lily D’Ambrosio.
The ministerial communique did not fail to mention a proposal by Squadron Energy to set up a facility to build imported LNG as a reserve for the winter of 2023 through a terminal being built by Squadron.
Squadron Chief Executive Officer Eva Hanley said the company is encouraged by the political decision to give Australia’s energy market operator the power to purchase and store gas on the market.
The ministers also agreed to require regulators to take emission reductions into account when making decisions in the energy market.
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