SYDNEY—Australia’s minister for resources said March 19 that the government would take action to avert an energy shortage if big natural gas producers did not boost supply for the country’s domestic market.
Australia is on track to become the world’s largest exporter of LNG, yet its energy market operator has warned of a domestic gas crunch beginning in 2019 that could trigger industry supply cuts and broad power outages.
Major gas producers, including ExxonMobil Corp. and Royal Dutch Shell, who have large export contracts, made guarantees to the government during last week’s talks that natural gas would be available for the domestic market.
“If the commitments are not met, if we don’t see more gas, we’ll act; we’ll take decisions in our national interest to secure our nation’s energy supplies,” Resources Minister Matt Canavan told the Australian Broadcasting Corp.
Australia’s power supply problems made international headlines last week when Tesla Inc. CEO Elon Musk offered to save South Australia, the country’s most renewable-energy dependent state, from blackouts by installing large-scale battery storage.
Manufacturers have long complained of tight gas supplies and soaring prices as producers have focused on supplying gas to LNG plants that have locked in 20-year export contracts. Restrictions on drilling coal seam gas have added to supply constraints.
Producers blame state drilling bans, uncertainty over Australia’s climate policy and, more recently, potential increases in petroleum producer taxes, for deterring development of new gas fields.
Canavan, who did not elaborate on what action would be taken, said the companies had given strong commitments to the government.
“This is what every nation around the world would do. The gas industry understand that. That’s what we need to see delivered,” he said.
Recommended Reading
WoodMac: Are MidEast, Asia NOCs Poised For M&A Resurgence?
2024-07-18 - International M&A spend by national oil companies (NOCs) has dwindled from nearly 50% to less than 5% today. But Wood Mackenzie researchers see NOCs playing a larger role in international M&A in the future.
OFS Consolidation Continues with Flowserve to Buy MOGAS
2024-08-13 - Flowserve will purchase MOGAS Industries for at least $290 million, part of a number of oilfield service company acquisitions announced in 2024.
Talos Makes Discovery, Adds Prospect to Drilling Portfolio in GoM
2024-09-05 - Talos Energy Inc. made an oil and natural gas discovery at the Ewing Bank 953 well and entered into an agreement to began prospecting the Sebastian well in the Gulf of Mexico.
Vivakor to Acquire Endeavor Crude Transport Cos. for $120MM
2024-09-25 - Vivakor said it is buying Endeavor Crude and related companies, which have a series of long-term strategic partnerships with customers in the Permian Basin, Eagle Ford Shale and the STACK play.
Apollo Closes $1.85B Take-private Acquisition of U.S. Silica
2024-08-01 - Following Apollo’s acquisition of U.S. Silica, the company will be led by current management and CEO Bryan Shinn.