SYDNEY, April 27 Australia's conservative
government has proposed a radical plan to restrict exports of
liquefied natural gas (LNG) at times when domestic shortages
push up local prices.
The Australian Domestic Gas Security Mechanism is aimed at
ensuring the domestic price of gas is affordable and reflects
global export prices.
The proposal follows two rounds of meetings between Prime
Minister Malcolm Turnbull and producers and the Australian
Energy Market Operator to discuss a domestic gas crunch.
"It is unacceptable for Australia to become the world's
largest exporter of liquefied natural gas but not have enough
domestic supply for Australian households and businesses,"
Turnbull said in a statement.
Under the plan, Australia's resources minister would have
the power to impose controls on LNG exports based on advice from
the market operator and regulator.
"If an exporter is not a net contributor to the domestic
market – that is, they draw more from the market than they put
in – they will be required to outline how they will fill the
shortfall of domestic gas as part of their overall production
and exports," Turnbull 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 Ltd - is
drawing gas out of the domestic market to help meet its export
Companies including 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.
High and rising prices for gas have become a political hot
potato for the Liberal National government as businesses warned
they could go bust if action was not taken.
(Reporting by Wayne Cole; Editing by Richard Chang)