The Australian government said on Thursday that it has secured additional gas supply commitments from producers for the winter season after the country’s competition regulator warned the east coast could face a shortfall during the July-to-September period.

Winter months in Australia, one of the world’s biggest LNG exporters, usually result in peak gas demand due to colder temperatures, with unexpected weather events or power plant outages upping the risk of shortages.

With a majority of Australia’s gas being exported, shortages and high energy bills for households have become key issues in its upcoming election.

The Australian Competition and Consumer Commission (ACCC) predicts a gas supply shortage of 9 petajoules (PJ) in the east coast gas market if liquefied natural gas (LNG) producers exported all of their uncontracted gas. It also predicts that the southern states could face a historic high deficit of 40 PJ during the quarter.

Resources Minister Madeleine King said the government had taken action to secure additional supply commitments from gas exporters for the third quarter, with gas producers committing to make an additional 9 PJ of gas available for the domestic market.

“These new commitments mean there will be a buffer of gas supply during a time of peak demand,” the statement said.

The ACCC has recommended the government to work with LNG producers to secure the additional supply currently uncommitted for the domestic market, Commissioner Anna Brakey said in a statement.

In January, the regulator had warned the southern states may need to import gas to meet demand beyond the short term. The expected shortfall in the southern states is double they faced last year, largely due to declining output from the Gippsland, Otway and Cooper basins, and higher demand for gas-powered electricity generation, it said.
Source: Reuters