* Govt still concerned about supply to households,
* Businesses not reassured by meeting outcome -industry
* Some domestic gas contracts offered at triple previous
By Sonali Paul
MELBOURNE, April 19 The Australian government
said it was "encouraged" on steps taken to avert a gas crisis
after meeting on Wednesday with producers and the energy market
operator, but it held out the threat of regulatory steps to
address any supply shortages.
Australia's energy market operator and east coast liquefied
natural (LNG) gas exporters updated Prime Minister Malcolm
Turnbull on Wednesday on measures taken since a March meeting to
discuss a domestic gas crunch expected to emerge from 2019.
Since then, companies like France's Engie SA and
Origin Energy, have sealed deals to ensure gas supply
to power plants at peak times, easing some short-term concerns
about shortages that have already helped to trigger blackouts.
"While this progress is encouraging, a lot more needs to be
done," Prime Minister Turnbull said in a statement following
talks on Wednesday.
"The Government remains concerned that the east coast export
LNG operators have not yet clearly articulated how Australian
households and businesses will get adequate supply at reasonable
prices," he said.
The Australian Energy Market Operator warned in March of a
shortage set to hit eastern Australia just as the country
becomes the world's top LNG exporter. At least one of the east
coast LNG plants, Gladstone LNG (GLNG) - operated by Australia's
Santos - is drawing gas out of the domestic market to
help meet its export contracts.
"No business that was facing gas price disaster this morning
will have been reassured by the outcome of this afternoon's
meeting," Australia Industry Group (AIG) Chief Executive Innes
Willox said in a statement, indicating ongoing worries from
consumers of domestic natural gas.
Gas producers declined to comment after the meeting.
AIG, which represents manufacturers that consume natural gas
or use gas-fired power, have called for a "national interest
test" on gas exports and pressed east coast LNG exporters, led
by Royal Dutch Shell, Origin Energy and Santos, to buy
LNG on the global market to supply their export clients and free
up natural gas for the local market.
The big concern is that the gas shortfall is fuelling price
hikes, hurting households and manufacturers such as brick makers
and fertiliser producers, who need gas for their operations.
Manufacturers are getting offers of gas for as much as
A$16-A$22 ($12-$17) per gigajoule for one-year deals, up from
A$6 a GJ in previous contracts, according to AIG.
Shell and Origin Energy own competing LNG export plants next
to GLNG, but have committed to being net suppliers of gas to the
That puts the heat on Santos, operator and 30 percent owner
of the Gladstone LNG plant, to keep some of its gas at home.
GLNG is owned by Santos, France's Total SA,
Malaysia's Petronas and Korea Gas Corp (KOGAS)
. Its contracted customers are Petronas and KOGAS.
($1 = 1.3314 Australian dollars)
(Reporting by Sonali Paul; Editing by Tom Hogue)