Malcolm Turnbull slaps export controls on gas exporters
Source: Financial Review
The Turnbull government will hit Australia's largest gas producers with limits on their exports in new measure to avert an east coast gas crisis and ensure there is enough supply to service the domestic market demand.
Despite warnings from the Prime Minister and two high-level meetings, the gas majors have refused to promise they would no longer export more gas from the Australian market than they produced.
In response the government has decided to impose an Australian Domestic Gas Security Mechanism on gas exporters from July 1 this year, which gives it the authority to limit companies' gas exports if they are emptying Australian gas reserves to meet overseas export contracts.
Santos, whose $US18.5 billion GLNG venture in Queensland is being blamed by many for causing the shortage because it sucks up large volumes of gas from the southern states, is expected to face the most immediate risk of export bans under the new regime.
"The government expects the decision to be a targeted, temporary measure of repair to restore certainty to the market during this time of transition," Prime Minister Malcolm Turnbull said last night.
On Wednesday afternoon it emerged the east coast LNG exporters had failed to meet the government's demands for a commitment to add gas to the Australian market instead of sucking it dry to meet long-term export contracts.
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